Abstract

The case study discusses India’s largest share buyback offer, issued by Tata Consultancy Services Limited (TCS), a leading global Indian IT company. Although, many experts believed that it was a good chance for investors of TCS to encash their investment as the buyback price of Rs. 2850 per share represented a premium of 25.51% on the volume weighted average market price of the share price during the three months before February 15, 2017, on the National Stock Exchange (NSE), others felt that investors should ignore the buyback and wait for the upside movement in the stock as investment in the company was a good long-term bet. Now, the investor has to decide whether to tender the stock or not.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• To understand the regulatory requirement related to share buyback
• To understand the process of the share buyback
• To debate whether shareholders should participate in the tender offer or not
• To explore the various motives behind a share buyback
• Analyze the effect of a buyback On a company’s key performance variables

Keywords

Share repurchase; Buyback; Dividend; Share buyback in India; Tender offer; Promoters participation; Distribution of wealth; Regulatory Framework of Buyback; Postal Ballot Form