TCI share price falls over 6% after announcement of share buyback at ₹1,200 per share

TCI Share Price: Transport Corporation of India Limited (TCI) saw its share price fall by over 6 percent after the company announced a share buyback. On August 24, 2024, TCI informed the stock exchanges that its board of directors had approved the buyback of up to 1,333,333 common shares at ₹1,200 per share through a tender offer. The buyback plan, aimed at returning value to shareholders, was initially well received, but the stock continued to face downward pressure in the market.

TCI share buyback

The company informed the Indian stock exchanges about the buyback move saying, “We refer to our letter dated August 24, 2024, wherein we informed the stock exchanges that the board of directors (“Board”) of Transport Corporation of India Limited (“Company”), at its meeting held on August 24, 2024 (“Board Meeting”), has approved buyback of up to 13,33,333 ordinary shares of the Company at a price of INR 1,200/- (One Thousand Two Hundred Indian Rupees) per ordinary share (“Buyback Price”) on a pro rata basis by way of a “Tender Offer” in accordance with the provisions contained in the Buyback Regulations (“Buyback”).”

TCI share buyback record date

In this regard, we wish to inform you that the Board of Directors at its meeting also considered and approved 4 September 2024 as the entitlement date (the “Eligibility Date”) for the purpose of determining the entitlements and names of the equity shareholders who would be entitled to participate in the Buy-Back in accordance with Regulation 42 of the Listing Regulations and Regulation 9(i) of the Buy-Back Regulations.

TCI Express released its Q1 financial results on August 13, 2024, reporting a 3.9% drop in revenue and a significant 31.02% drop in profit year-over-year (YoY). The company’s revenue fell 7.61% compared to the previous quarter, while profit fell 29.41%.

The financial report highlighted the growth in selling, general and administrative (SG&A) expenses, which increased by 3.16% quarter-on-quarter (QoQ) and 3.87% year-on-year. This growth further weighed on the company’s profitability.

Operating income decreased by 30.87% quarter-on-quarter and 33.84% year-on-year, indicating difficulties in maintaining operational efficiency in the face of rising costs.

Earnings per share (EPS) for the quarter amounted to ₹5.8, down 30.95% YoY, reflecting the company’s ongoing challenges in maintaining stable profits.

Considering the market performance, TCI Express has recorded a negative return of -0.96% over the past week, -6.73% over the past six months and a yearly return of -17.85%. These numbers indicate growing investor concerns about the company’s recent financial results.

TCI stock opened today with a drop of ₹1080 on NSE and hit intraday low ₹1061.15 per share. The share price ended at ₹1,145.55 per share on Friday last week. This is the first time that the company’s board has announced a share buyback.

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