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Tata Consultancy Services’ buyback offer at ₹2,850 a share got tepid response on Day 1.
The company saw demand for only 23,702 shares on the BSE out of 5.6 crore equity shares offered to be bought back. Roughly 28.1 lakh shares were yet to be confirmed as at 3.30 p.m. on Thursday. The ₹16,000-crore buyback offer will close on May 31.
The company’s stock price, however, closed up 2.84 per cent at ₹2,525 and was the second-best performing stock among Nifty 50 companies
“FY18 outlook is not significantly different from FY17; currency may negatively impact margins. Any signs of a cyclical pick-up can lead to a significant rally in Indian IT stocks and earnings estimates would be revised and multiples could get re-rated.
“In the absence of a cyclical pick-up, however, lack of growth, INR appreciation and US immigration concerns can remain overhangs,” said Credit Suisse in a note.
Preference for Infy, HCL TechIIFL prefers HCL Technologies, Infosys and Tech Mahindra over TCS and Wipro. Hence, investors are better off giving up their shares in the TCS’ buyback offer as the outlook for the information technology sector in general is not looking up, said analysts.
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