Wipro shares tank post approval of Rs 12,000 crore share buyback plan; offer price, record date & more

Shares of Wipro fell 2 per cent in Tuesday's trade after the approval of Rs 12,000 crore, or $1.46 billion, share buyback plan. The share buyback is proposed to be made on a proportional basis under the tender offer process. Wipro, whose shares have been worst Nifty performers in the last one year, would buy back a maximum of 26,96,62,92 shares at at a share buyback price Rs 445 apiece. This price was at a 10 per cent premium to Wipro's Monday closing price of Rs 404.30, but the announcement failed to cheer its shareholders.

The stock fell 1.86 per cent to hit a low of Rs 396.40 on BSE. The members of the promoter and promoter group have expressed their intention to participate in the share buy back. The issue represents 4.91 per cent of the total number of equity shares in the paid up equity share capital of the IT company. The share buyback size constitutes 20.95 per cent of te fully paid-up equity share capital and 17.86 per cent of free reserve of the company.

Wipro has fixed the record date as June 16, which means shareholders who hold Wipro shares as of June 16 (Friday) would be eligible to participate in the issue.

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"The buyback will be conducted on a proportionate basis through the tender offer route as prescribed under the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018, as amended, and the Indian Companies Act, 2013, as amended, and rules made thereunder, including any statutory modifications or re-enactments thereof, from all holders of Equity Shares who hold Equity Shares as of Friday, June 16, 2023, the record date for the buyback," Wipro said.

In a note, AUM Capital said Wipro had closed FY23 with the strongest ever bookings recorded in a year where it delivered two consecutive quarters of total bookings of over $4.1 billion. "It is witnessing a visible change in the structure of its deals and its market position and is in the process of winning large transformation deals, benefitting from a consolidating market through deepening relationships with existing clients," it said.

For the June quarter, Wipro expects the revenue from the IT Services business including India State Run Enterprise (ISRE) to be in the range of $2,753 million to $2,811 million, which translates to sequential guidance of minus 3 per cent to minus 1 per cent in constant currency terms.

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