In today’s breaking news, Transamerica and TCS have terminated their $2bn dollar deal. The arrangement was mutually terminated reportedly due to concerns in today’s macro-economic environment. The termination led to the TCS stock falling 1.27% today, to the last traded price of Rs 3,175.25. In the process, the stock lost over Rs. 15,000 crore of its market value.

$2bn deal scrapped between TCS and Transamerica

The ten-year deal was signed in 2018, and was supposed to be for a total of 10 years, and would guarantee the IT giant $200 million dollars a year in annual revenue. With four and a half years still left in the deal, its scrapping will see the companies work together for two-and-half years to complete this sudden transition.

What this means for the company, and the sector as a whole, only time will tell, but the rising uncertainty around IT stocks has been reignited, with TCS now on the list of software companies with unusually slow and bumpy starts to the financial year. This is a good opportunity, however, to take advantage of investors’ lack of faith in IT stocks and capitalize on fundamentally good stocks which are falling in price due to the mainstream market belief.

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