TCI sets Rs 150 crore buyback at 14 per cent premium as shares hover near 52-week low

Transport Corporation of India Ltd has approved a share buyback of up to 15,62,500 equity shares at Rs 960 apiece, committing up to Rs 150 crore through the tender-offer route at a time when the Logistics company’s stock remains under pressure.

The buyback, approved by the board on September 29, 2026, accounts for up to 2.03 per cent of TCI’s paid-up equity capital as of March 31, 2026. The tender offer will open on October 15 and close on October 22, while October 9 was set as the record date for determining eligible shareholders.

At Rs 960 per share, the offer price is about 14.4 per cent above TCI’s market price of Rs 839.20 at 10:15 a.m. on October 13, 2026. The stock was trading 0.35 per cent below its previous close of Rs 842.15.

The company said it had considered accumulated free reserves and cash liquidity before setting aside Rs 150 crore, adding that the distribution would not affect its ability to meet operating cash requirements or pursue growth opportunities. The transaction represents 6.76 per cent of standalone paid-up equity capital and free reserves, and 6.15 per cent on a consolidated basis.

TCI has explicitly linked the buyback to its share price being at a 52-week low, arguing that an offer at a premium signals management confidence in the business and its earnings profile. At the prevailing price, the stock was about 31.7 per cent below its 52-week high of Rs 1,229.30 and about 4 per cent above its 52-week low of Rs 806.75. Over the past year, the shares have declined 29.52 per cent, compared with a 6.29 per cent fall in the BSE 500.

The capital return is notable because TCI is simultaneously pursuing an expansion-led investment programme. Management has indicated FY27 capital expenditure of about Rs 500 crore to Rs 600 crore, with spending planned on ships, warehouses, trucks, rail rakes, warehouse equipment and technology. The Rs 150 crore buyback is therefore equivalent to roughly 3 per cent of the company’s FY26 consolidated revenue of Rs 4,965 crore, suggesting that TCI sees room to fund both shareholder distributions and capacity additions.

The company’s business spans road freight, supply chain management, warehousing, rail logistics and coastal shipping. Its latest quarterly performance showed net sales rising 9.58 per cent year-on-year to Rs 1,248.5 crore in the June 2026 quarter, while profit after Tax was broadly flat at Rs 88.2 crore. Margin pressure from fuel costs, delayed pass-through of diesel price increases, warehouse ramp-up costs and volatile bunker fuel prices has remained a key near-term consideration.

The promoter and promoter group, which held 68.66 per cent of the equity capital as of September 28, have said they will not participate in the buyback. If eligible public shareholders tender shares in full accordance with their entitlement, promoter ownership could rise to 70.08 per cent after completion, while public shareholding could decline to 29.92 per cent from 31.34 per cent. The projected public float would remain above the 25 per cent minimum public shareholding threshold.

TCI will reserve for small shareholders the higher of the shares corresponding to their entitlement or 15 per cent of the total shares proposed for repurchase. Shares accepted in the buyback will be extinguished within seven working days after payment.

On the company’s projections, the lower share count is expected to lift standalone earnings per share to Rs 59.10 from Rs 57.89 and consolidated earnings per share to Rs 60.69 from Rs 59.49. Consolidated return on net worth is projected to improve to 21.13 per cent from 20.42 per cent, although consolidated net worth is expected to reduce by about Rs 150 crore following the payout.

Disclaimer: The article is for informational purposes only and not investment advice.