Shares of Tata Investment Corporation rose as much as 8 percent to Rs 890 apiece on BSE in early morning trade on Monday. Its board approved a proposal to buy back 8.17 percent of the total paid up capital on Friday through a tender offer.

The share buyback would exceed Rs 4,500 million in an aggregate amount at Rs 1,000 apiece, which is 22 percent higher than Friday's close of Rs 823 per share on BSE. Tata Investment Corp's share price has previously touched its 52-week high of Rs 955 on 10 January this year.

"The board has approved a proposal to buy back up to 4.5 million equity shares of the company for an aggregate amount not exceeding Rs 4.50 billion being 8.17% of the total paid-up equity share capital at Rs 1,000 per share," the company said on Friday, after market closing hours.

The buyback proposal will be made from the shareholders of Tata Investment Corp on a proportionate basis under tender offer route, the company further said. After the board said that it was considering a buyback plan for its 16 November meeting, the shares of Tata Investment have rallied over 27 percent since 13 November from Rs 702 per share.

Share buyback helps curb the decline of share value by reducing its supply in the market as it will help maintain a better P/E multiple. As of September 2018, Tata Sons held 68.14 percent stake in Tata Investment Corporation and the public shareholders have 27.02 percent stake, of which 18.69 percent was with individual shareholders while 3.91 percent was with institutional investors.