Ratings agency S&P expects IT services major TCS to remain net cash positive even if its Rs 16,000-crore buyback offer gets fully subscribed.

Ratings and outlook on Tata Consultancy Services are not affected by the company’s Rs 16,000-crore offer for share repurchases , Standard & Poor’s said in a statement.

Earlier this week, TCS had announced a Rs 16,000-crore share buyback — biggest in the Indian capital market, as it looks to return surplus cash to shareholders.

“We believe TCS will maintain its net cash positive financial position, even if its offer for share repurchase were to be fully subscribed. As of December 31, 2016, TCS has net cash and cash equivalents of Rs 386 billion (Rs 38,600 crore),” it added.

TCS’ operations continue to perform in line with expectations and supports the rating, it said.

S&P said Indian technology players will continue to grow at a slightly slower pace over the next two to three years due to technological disruptions.

However, TCS is expected to maintain its leadership position within the overall Indian technology space.

The company’s modest acquisition spending and minimal capital spending will also leave significant free operating cash flows on its balance sheet, it said.

“Our current rating on TCS already factors in a certain level of acquisitions and shareholder distributions by the company. We continue to believe that the company will maintain financial discipline reflective of its credit profile,” it added.

S&P expects Indian IT majors like TCS, Infosys and Wipro to continue to generate significant cash flows despite making modest acquisitions to augment their technological capabilities.

“We also expect the companies to continue to optimise their shareholder returns through increased distributions,” it added.

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