Apple has authorised a second program to repurchase USD 110 billion in stock, in addition to raising its cash dividend by 4 per cent . This buyback is the biggest in the history of the business. The tech giant ties with Chevron for sixth place and is in charge of the top five share repurchases made by American businesses.
Buyback is one of the major corporate actions taken by the management of the company.
A buyback: what is it?
A buyback is a tactic used by companies to purchase their outstanding shares. Repurchases are a means of lowering the quantity of shares that are offered for sale.
Before share capital is lowered, shares are canceled. Companies repurchase shares for a variety of purposes, such as to keep other shareholders from acquiring a controlling position or to boost the value of the shares that are still available by reducing the supply.
Purpose of Buyback
Repurchases lower the number of outstanding shares, which raises the stock's value and frequently results in positive earnings per share (eps).
A repurchase of shares can serve as evidence to investors that the company has enough cash on hand for unexpected expenses and little chance of financial difficulties.
Process of buyback
A tender offer is a document that shareholders may receive, giving them the choice to tender all or some of their shares at a price above the market rate at a specified point in time.
Investors who tender their shares rather than holding onto them are rewarded with this premium.
Businesses may even have a defined share repurchase program that purchases shares at specific times or on a regular basis. Companies may also buy back shares on the open market over a prolonged period of time.
A business may choose to take on debt, use cash on hand, or use its operating cash flow to finance its buyback.
Tata Consultancy Services (TCS) Buyback offer in 2023
The IT giant Tata Consultancy Services (TCS) launched a Rs 17,000 crore share buyback program on December 1st, 2023, with the aim of acquiring 1.12 per cent of the company's shares.
TCS has committed to the buyback of 4,09,63,855 fully paid-up equity shares, valued at Rs 4,150 per share at a face value of Rs 1. When the stock's closing price on November 23 was taken into account, the buyback was conducted at an 18.3 per cent premium. TCS's stock increased by 0.6% to close at Rs 3,478 on November 28.
BSE Limited Buyback
The buyback price was raised by the BSE on Friday, September 1, from Rs 816 to Rs 1,080 per share through a tender process. The company plans to repurchase 34.7 lakh equity shares, or 2.56 per cent of the total equity shares in the company's paid-up equity capital, as of March 31, 2023.
The buyback's record date is set for September 14, 2023. The price indicates a 1.6 per cent premium over the equity shares' closing price on Thursday, August 31, 2023, on the NSE.
