BENGALURU: Tata Consultancy Services announced a Rs 16,000-crore ($2.39-billion) share buyback, sparking a 4% surge in the stock price and intensifying pressure on rivals to follow suit as investors clamour for returns amid slowing growth.India’s biggest IT services company said it will buy back 56 million equity shares , about 3% of total equity, at Rs 2,850 apiece, a 14% premium to the stock’s `2,506.5 close on Monday on the BSE. TCS had announced last week that the board would meet on Monday to consider the plan.“The buyback is proposed to be made from the shareholders of the company on a proportionate basis under the tender offer route,” TCS said in an exchange filing.The move by the Mumbai-headquartered company comes less than two weeks after rival Cognizant said it would return $3.4 billion to shareholders — in dividends and increased buybacks — after activist hedge fund Elliott Management questioned the company’s capital-allocation policy.TCS had $5.69 billion in cash and cash equivalents and investments on its books on December 31. Free cash-flow generation crossed $1billion in the third quarter.“This buyback is far more than I expected,” said an analyst at a Mumbai brokerage. “It dwarfs the other buybacks we have seen among Indian IT players, though it is still smaller than Cognizant’s. But it increases the pressure on everybody else.”Following Elliott’s letter to Cognizant in November, investors had begun asking Indian IT firms to boost buybacks to compensate shareholders amid a sluggish growth environment, EThad reported.Local rivals Infosys and Wipro have said their boards review capital allocation regularly.Both Infosys and Wipro have been stepping up dividends but the amount of cash on their books has investors asking for much more. As of December 31, Infosys had $4.48 billion of cash and investments on its books. Wipro had $4.88 billion.Among India-listed companies, Infosys and Wipro have the most cash as a proportion of market capitalisation and should consider returning more cash to shareholders, said Ambit Capital analyst Sagar Rastogi.Wipro had announced a Rs 2,500-crore buyback in April last year. Analysts said any buyback by Infosys would be limited given the company’s aggressive growth plans.“I don’t think Infosys will be able to do a mega buyback unless they reduce their growth targets. If you want to reach $20 billion in revenue by 2020 and you have said that $1.5 billion of that will come from acquisitions, you have to hold cash on the balance sheet,” a second analyst told ET. He declined to be identified. Infosys has already been at the receiving end of calls asking it to buy back shares, having deflected such demands in 2014.At the time, former chief financial officers V Balakrishnan and TV Mohandas Pai and current Infosys board member DN Prahlad had sought a Rs 11,000-crore buyback.Last week, Infosys chief operating officer UB Pravin said the company was looking at all options and buybacks could happen at the appropriate time.