Is the TCS stock buyback a no-brainer trading opportunity?


Tata Consultancy Services (TCS) shares were trading in line with benchmark indices ahead of the repurchase offer, sliding roughly 2% on Monday.

If ordinary investors want to participate in TCS’s repurchase offer, Monday is the last day to purchase the stock. On the record date, February 23, the stock should be in the investor’s Demat account.

Tata Consultancy Services’ board of directors approved a buyback of 4 crore shares, or 1.1 percent of company ownership, on January 12 at Rs 4,500 per share.

The vast majority of experts are bullish on the stock and advise investors to take advantage of the repurchase. Market participants with a short-term perspective may view this to be a good opportunity.

This could be a smart approach to making money in a volatile market.

Retail investors, on the other hand, must guarantee that the share value does not surpass the Rs 2,00,000 category limit set by the country’s largest IT company.

TCS repurchase is an excellent opportunity for individual investors, according to Santosh Meena, Head of Research, Swastika Investmart, which is around 19% higher than Friday’s closing price.

“In the past, the acceptance ratio has been around 70%, and the stock price has crossed the buyback price,” he explained. “Retail investors should participate in the TCS repurchase,” according to the business, “where we estimate a 50-70 percent acceptance rate and investors can hold the remaining shares for the long term.”

However, based on the fundamentals, the prognosis is bright, despite slightly inflated valuations, and the company has already experienced some price correction from its 52-week high, according to experts.

TCS fundamentals have been steadily improving, according to Gaurav Garg, Head of Research at CapitalVia Global Research, and the buyback of shares demonstrated management’s confidence in the company’s future cash flows.

TCS stock has already dropped dramatically in the last month, presenting an appealing risk-reward opportunity for traders and investors, he added. “The stock should be viewed as a long-term investment by its owners.”

A buyback of shares is a corporate operation in which a firm buys back its current shareholders’ shares, usually at a higher price than the market price.

The number of shares outstanding in the market decreases as the corporation buys back its shares. A buyback can be used by companies to invest in themselves.

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