Tata Consultancy Services to consider share buyback on October 7

Tata Consultancy Services (TCS) will consider a proposal for buyback of equity shares on October 7, when the company board meets for the second-quarter results, the IT giant said in a stock exchange filing without giving any further details.

If approved this would be the third buyback for the company. In 2018 and 2017, the company went for a Rs 16,000 crore share buyback each with 100% acceptance ratio.

TCS also informed separately in another filing that in the legal dispute with the US-based software firm EPIC Systems Corporation, TCS would be providing Rs 1,218 crore as an exceptional item in the financial results for the three and six months ended September 30, 2020, to be announced on October 7, 2020.

On August 20, 2020, a US Court returned a verdict on the appeal filed by TCS, reducing the award of damages. The court held that the punitive damages award of $280 million is constitutionally excessive, vacated the punitive damages award and directed the trial court to reassess the punitive damages. The court upheld the compensatory damages award of $140 million.

TCS in its exchange filing in September 2020 added that it has filed a petition seeking a rehearing on both compensatory and punitive damages.

“The provision in the books for legal claim is being made as a matter of prudence,” the company said in its filing.