Wipro share buyback: Opportunity to earn
up to 13%; should investors tender
their stock? What analysts say

Produced by: Harshita Tyagi
Designed by: Pragati

Wipro Ltd in April said that it would buyback up to 269,662,921 shares of face value Rs 2 each from the shareholders of the company on a proportionate basis, by way of a tender offer, at a price of Rs 445 per share.

Wipro share buyback

Wipro board approved buyback of up to 26.96 crore equity shares, which is 4.91% of the total number of equity shares on a proportionate basis, in the offer period.

Wipro share buyback size

Wipro buyback issue is likely to open in June-end. Wipro's policy of capital allocation includes a payout of minimum 45-50% of net income for a period of trailing three years. FY23 payout alone is at about 37% of the past three years net profit, which excludes buyback in FY21, said Elara Capital.

Wipro share buyback date

Wipro share buyback price of Rs 445 is around 16% premium to the current market price of Rs 383 apiece, which is a good opportunity for investors, according to analysts.

Good opportunity
for investors

Emkay Global Financial Services said investors can purchase Wipro shares at current market price and tender them at Rs 445 in the offer period. “We expect acceptance ratio to be between 10-15% (non-retail) considering 25-50% tendering by large shareholders," Emkay Global said in its note.

Wipro share buyback
acceptance ratio

Wipro share buyback offers an opportunity for retail investors to earn between 4% and 13%, depending on the extent of the acceptance of the buyback offer, said SBI Securities.

Investors can earn
up to 13%

At a 45% acceptance ratio, and a market price of Rs 383 post the pay-out, investors can earn an absolute return of nearly 6.74% over the next 60 days, according to SBI Securities.

Absolute return of 6.7%

IIFL Securities expects retail acceptance ratio to be around 40% and general acceptance at 4.2%. "Members of the promoter and promoter group of the company have indicated their intention to participate in the proposed buyback," the brokerage said.

Wipro buyback retail acceptance ratio

Wipro share buyback is a good opportunity for retail shareholders who are holdings worth less than Rs 2 lakh, according to Prashanth Tapse, Senior VP (Research), Mehta Equities. "Considering historic evidence, we advise retail investors to buy Wipro at the current market price and tender at Rs 445, a premium of about 17 can generate decent ROI in the consolidating markets," he said.

Should investors tender
Wipro shares?

Wipro share price has tanked around 20% in the last one year. The IT stock has fallen over 2% so far this year, underperforming benchmark Nifty50. Over the last five years, Wipro has nearly doubled long-term investors' money as the stock has jumped around 90%. In comparison, Nifty50 has rallied 72% during the period.

Wipro share price

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