Tuesday, February 22, 2022

Luring 'EXPERTS' advise on TCS buyback offer to investors - Be Aware

So many investors got excited on advise by there friends and brokers on TCS buyback.

What was the offer?

_buy TCS shares at market price before 21st Feb.,2022 (say @3800)

_give all shares to co. under their buy-back offer (offer price @4500)

_40% avg.may be accepted @4500 each under buy back

_hold or sell balance (60%)

_profit between 6% to 16% depending upon price shown and leveraged or non-leveraged (as presented by thise advisors to many investors)

So many investors think this is pure profit of 6% to 16% in 45-90 days.

A-lot of investors were not aware and not connect on % buyback acceptance ratio i.e. not all shares will be accepted @4500 meaning some share bought @3700-@3800 range will still remain with them.

B-Lots of them were not able to connect with the fact that if markets go down and if the share price of TCS goes down there overall profitability will go down.

Example to understand point B-

_buy price 3800 -10 shares so amount invested Rs 38000.

_say acceptance ratio is 40% so you will get Rs.4500 each for 4 shares accepted.
(Means you received Rs.18000)

_6 shares post buy back remain with you at Market price then

Check 2 sample scenarios in attched Pictures to understand better.

Out of 100 calls, I only suggested 3 to do this. (good understanding, ther risk profile, holding period and time and effort)

This was one of many such schemes floated by 'EXPERTS'.

#tcs #buyback #financialplanner #financialplanning #financialfreedom


0 comments: