Shares of Rs 10,000 crore may be bought back by TCS

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The Tata Consultancy Services (TCS) board is meeting on Friday to consider a proposal to buy back shares, the company said in a stock exchange filing. Sources told TOI it might be to the extent of Rs 10,000 crore. TCS has said previously that it will pay out 100% of its free cash flows to shareholders. In the 2017-18 financial year, TCS made a 118 %.

An email sent to TCS did not elicit a response till the time of going to press. Last year, TCS announced a Rs 16,000-crore mega share buyback at Rs 2,850 apiece that closed on May 31.

Rival Cognizant Technology Solutions plans to return $3.4 billion to its shareholders over the next two years through share repurchase and dividends. CTS will buy back $1.2 billion shares during 2017 and 2018. Infosys did a $2-billion share buyback, and recently identified Rs 10,400 crore ($1.6 billion) to be paid out to shareholders for the financial year 2019.

Increasingly, companies are looking at tax-efficient ways of returning cash to shareholders and a buyback is seen to be by far the most optimal way.

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