The ongoing TCS share buyback offer skewed in favour of small holdings investors is illogical and a big gimmick. Investors holding 84 shares and less have an acceptance ratio of 9:20 while those above that number the ratio is only 10:409 which is ridiculous. If you hold 84 shares the company would accept 40 shares in buyback while if you hold 85 shares then only two shares would be accepted. Buyback is one way of rewarding shareholders when the company has large cash on its books but the present TCS exercise is actually punishing long term investors who have kept faith in the company.
A better method to reward loyal shareholders would have been to accept shares at premium of those who have kept faith in the company with a time bound period of say those who are with the company from its initial public offer or those with a decade old holding. Hope better sense prevail in future buybacks when loyalty gets rewarded or dividend payouts which seems a fair method than the present gimmick!
(The views expressed by the author in the article are his/her own.)
