New Delhi: Tata Consultancy Services (TCS) on Monday became the second Indian firm after Reliance Industries to attain a market valuation of more than Rs 10 lakh crore helped by a rally in its share price.
The stock jumped over 7 per cent ahead of its board meeting later this week to consider a share buyback proposal.
The stock rose by 7.30 per cent to close at Rs 2,706.85 on the BSE. During the day, it jumped 8 per cent to its record high of Rs 2,727.
It zoomed 7.55 per cent to settle at Rs 2,713.95 on the NSE.
Following the rally in its share price, the company’s market valuation jumped Rs 69,082.25 crore to reach Rs 10,15,714.25 crore at close of trade on the BSE.
TCS last month became the second Indian firm to have a market valuation of over Rs 9 lakh crore after Reliance Industries Limited.
It is the second most-valuable domestic firm in terms of market capitalisation.
Meanwhile, Reliance Industries Limited is the first Indian firm to have crossed the Rs 10 lakh crore market valuation mark.
Its market valuation is currently at Rs 14,95,187.95 crore – the highest for any listed company in the country.
TCS in a regulatory filing on Sunday night said that “… The board of directors will consider a proposal for buyback of equity shares of the company, at its meeting to be held on October 7, 2020.”
No other details of the buyback plan were disclosed.
The TCS board is also slated to consider its financial results for the September quarter and declaration of a second interim dividend to the equity shareholders at the meeting.
In 2018, the Mumbai-based company had undertaken a share buyback programme worth up to Rs 16,000 crore.
The buyback, at Rs 2,100 per equity share, had entailed up to 7.61 crore shares. In 2017 too, TCS had undertaken ?a similar share purchase programme.
The company had announced the mega buyback offer as part of its long-term capital allocation policy of returning excess cash to shareholders.
“TCS has announced that the board of directors will consider a proposal for buyback of equity shares … We believe that while this is a positive development for the company it is also a positive development for the sector given that it could be a precursor for other IT companies to follow suit.
“Most IT companies have large surplus cash on books which can be used to reward shareholders either in the form of dividends or buybacks,” said Jyoti Roy – DVP- Equity Strategist, Angel Broking Ltd.