The share price of Tata Consultancy Services (TCS) rallied over 8 percent to a fresh high on Monday after the company said that the board will meet later this week to consider a share buyback proposal. No other details of the buyback plan were disclosed.

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"The board of directors will consider a proposal for buyback of equity shares of the company, at its meeting to be held on October 7, 2020,” Tata Consultancy Services (TCS) said in a regulatory filing. The board is also slated to consider its financial results for the September quarter and declaration of a second interim dividend to the equity shareholders at that meeting.

Post the announcement, the stock rose to its all-time high of Rs 2,728.10 per share on NSE, up as much as 8.1 percent in intra-day deals. The IT major last hit an all-time high of Rs 2,554 on September 22. The stock settled 7.55 percent higher at Rs 2,713.95 on NSE.

Other IT stocks were also positive, lifting the Nifty IT index 3.5 percent. Wipro also surged 7 percent while Infosys and Tech Mahindra rose between 2.5 percent and 3 percent.

In a report, ICICI Securities said that it believes TCS has the potential to do a buyback of Rs 20,000 crore, which is around 2 percent of its market capitalization.

“We expect the company to continue delivering industry-leading growth and higher return ratios in the coming years. Further, the company has maintained a healthy cash flow generation and has a consistent dividend payout policy. Hence, we remain positive on the stock from a long-term perspective,” it added.

First Published:Oct 5, 2020 12:17 PM IST