Tata Consultancy Services (TCS), India’s largest software services firm, today announced a Rs 16,000 crore share buyback offer. The company has proposed to buy back up to 7.61 crore shares at Rs 2,100 per share, comprising 2 per cent of the total paid-up equity capital. TCS shares surged 3 per cent today at Rs 1840 on the National Stock Exchange. Also Read - Tata Consultancy Services Announces Salary Hike For Its Employees, Second Time in Six Months

TCS said in a BSE filing ” Tata Consultancy Services Limited has informed the Exchange that the Board of Directors of the Company at its meeting held on June 15, 2018 has approved a proposal to buyback up to 7,61,90,476 Equity Shares (Seven crore sixty one lakh ninety thousand four hundred and seventy six only) of the Company for an aggregate amount not exceeding Rs 16,000 crore (Rupees sixteen thousand crore only) (hereinafter referred to as the “Buyback Size”) being 1.99% of the total paid up equity share capital, at Rs 2,100 (Rupees two thousand one hundred only) per Equity Share (hereinafter referred to as the “Buyback Price”).” Also Read - Stocks to Buy Before Budget 2021 India: Here Are 5 Sectors to Look Out For

Buybacks are, generally, announced to improve the price-earning ratio. It is also used for returning surplus cash to shareholders. It also supports stock price in the down market. Also Read - TCS 3rd Most-Valued IT Services Brand Globally, Infosys & HCL Also Secure Spots in Top 10

Last year many IT firms, such as Infosys and HCL Technologies came up with buyback schemes last year.TCS paid Rs 26,800 crore as dividends and buyback during the financial year 2018.

On Tuesday TCS expanded its agreement with M&G Prudential taking the deal size to more than USD 1.2 billion. Earlier, the deal size was USD 690 million. M&G Prudential had an AUM of 351 billion pounds, at the end of December 2017.

TCS said in a statement, “The agreement has now been expanded to cover an additional 1.8 million customer policies which will move from M&G Prudential to TCS, bringing the total number of policies covered by the partnership to 5.8 million, and is worth an additional 500 million pounds (USD 668 million) over the term of the contract.”