Tata Consultancy Services (TCS), the country's largest information technology company, on Wednesday announced a share buyback plan of Rs 16,000 crore, subject to shareholders approval, the company told stock exchanges in an earnings filing. The company plans to buy back 5.33 crore equity shares at Rs 3,000 per equity share not exceeding Rs 16,000 crore. The share buyback price is at a premium of nearly 10 per cent to the Wednesday's closing price.
"The Board of Directors at its meeting held on October 7, 2020, has approved a proposal to buy-back upto 5,33,33,333 equity shares of the Company for an aggregate amount not exceeding Rs 16,000 crore being 1.42 per cent of the total paid up equity share capital at Rs 3,000 per equity share subject to approval from shareholders," the Mumbai-based company said.
The buyback comes at a time when TCS parent Tata Sons is engaged in a fight with one of its oldest shareholders, the Shapoorji Pallonji Group, which recently said "a separation from the Tata Group is necessary".
TCS' net profit in quarter ended September 30 rose nearly 7 per cent sequentially to Rs 7,475 crore. While, its revenue from operations came in at Rs 40,135 crore, up 4.7 per cent sequentially.
Its revenue in constant currency terms grew 4.8 per cent sequentially and 7.2 per cent in dollar terms, TCS added.
The company has also said that the salary increases for its employees will be rolled out effective October 1.
"Driving accelerated business value realization of our customers' digital investments has resulted in broad-based revenue growth. The strong order book, a very robust deal pipeline, and continued market share gains give us confidence for the future," Rajesh Gopinathan, chief executive officer and managing director, TCS said in a statement.
The company also announced a second interim dividend of Rs 12 per equity share.
TCS shares ended nearly 1 per cent higher at Rs 2,737.40, its record closing high ahead of the earnings announcement.