Wipro announces its biggest-ever share buyback program worth Rs 12,000 crore
Indian IT giant Wipro announced on Tuesday that it will launch a share buyback program worth Rs 12,000 crore ($1.7 billion), the largest in the company’s history. The buyback will open on June 22 and close on June 29. Wipro will buy back 26.97 crore shares at a price of Rs 445 per share, a 17% premium to the closing level on Monday. The move is expected to boost earning per share (EPS) and return on equity for the company.
Reservations for retail investors and the number of shares they can apply for
Retail investors who hold shares worth less than Rs 2 lakh have been specified in the offer letter. They can apply for 62 shares for every 265 shares held as of June 16. General category investors can apply for 26 shares for every 603 shares held. If the buyback is fully subscribed, the promoter’s stake in the company will increase from 72.91% to 73.37%.
Benefits of the share buyback program for Wipro
Share buybacks can improve financial ratios such as EPS and return on equity. Wipro’s EPS is expected to increase from 20.73% to 21.79% after the buyback. Meanwhile, the return on equity is expected to decrease from 17.75% to 16.89%. Wipro’s promoters, including Azim Premji and Rishad Premji, have also expressed their intention to participate in the buyback program.
Current share price of Wipro
Wipro’s shares were trading at Rs 382.60 on Tuesday, up 0.64% from the previous session’s close of Rs 380.15. The stock’s 52-week high is Rs 444.90.
In summary, Wipro’s announcement of its largest-ever share buyback program is expected to benefit the company’s financial ratios and boost its EPS and return on equity. Retail investors holding shares worth less than Rs 2 lakh and general category investors can apply for 62 and 26 shares, respectively, for every set number of shares held. The company’s promoters have also expressed their intention to participate in the buyback program.
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