Tatas having clean sweeped in Tata Mistry dispute, with Supreme Court 3 Judge Bench, led by CJI, delivering judgment with all legal points in favour of Tatas, may see all major actions now revolving around its flagship TCS. Probable move that could be seen now from TCS, are expected to be -
1) Meger of Tata Elxsi, with TCS, which will see equity dilution of TCS by not over 2%, while topline and bottomline of TCS can also rise by 2%, thus seen to be EPS accretive. FY 21 estimated income of TCS is expected at Rs. 1,65,000 cr, with PAT of Rs. 33,000 cr. Tata Elxsi for FY 21 estimated with an income of Rs. 1,850 cr and PAT of Rs. 310 cr. This will increase stake of Tata Sons in TCS by about 0.75%, to sub 73%, swapping 42.22% stake of Tata Sons in Tata Elxsi.
2) TCS is having cash and cash equivalent of Rs. 60,000 cr as at 31-3-21. TCS thus may go for a share buy back of about Rs. 30,000 cr, at around Rs. 3,750 per share. In this buy back, Tata Sons may tender shares of Rs. 21,000 cr, being 70% of expected buy back size.
3) TCS had its last share buy back on 1st Jan 2021, at Rs. 3,000 per share, of 5.33 cr. share for Rs. 16,000 cr. Tata Sons tendered 3.33 cr shares in this buy back and garnered about Rs.10,000 cr., being 62.5% of buy back size.
Some corporate announcements may be expected during the day in this regard.
Insiders are also feeling that this move will give TCS, an edge to have M Cap leader in Indian listed stocks.
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