In a filing with stock exchanges on Thursday, IT major Wipro communicated that its board has approved a buyback proposal for equity shares of the company. The large buyback totalling up to a value of Rs 12,000 crore comes after a long pause of two years. The investors cheered the decision taking the stock up by 3.6% to the day’s high of Rs 388 per share.
The last share purchase by the IT giant took place between late December 2020 and early January 2021. During that period, it bought back 22,89,04,785 shares (aggregating to 96.38% of the total buyback offer). It resulted in a total outflow of Rs 9,156 crore from the company’s reserves.
The board has fixated the floor price of Rs 445 per share for the buyback program. The stock exchange filings stated that the maximum number of shares will be 26,96,62,921 representing 4.91% of the total paid-up equity shares of the company. For the program, it has capped the maximum value of Rs 12,000 crore.
The buyback floor price translates into a premium of 15% from the present trading levels.
Furthermore, promoters and members of the promoter group have submitted their interest to engage in the buyback process. The company will update on the process, record date, timelines and other details in due time once the proposal is passed with the special resolution by shareholders.
For the March quarter ended 2023 (Q4F23), the company recorded a marginal decline in revenue to Rs 23,190 crore from Rs 23,229 crore for the December 2022 quarter (Q3FY23). However, the net profit for the quarter slightly rose to Rs 3,094 crore from Rs 3,065 crore.
On year on year (YoY) basis, the income was up by 11% from Rs 20,861 crore it clocked in March 2022 quarter (Q4FY22). The profit after tax was almost the same at Rs 3,092 crore.
As per the recent shareholding data for March 31 2023, the promoters own a majority 72.92% stake in Wipro. Domestic institutional investors (DIIs) and foreign investors hold 2.74% and 9.78% stakes respectively. The balance of 14.56% shareholding lies in the hands of the public.
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