Wipro Share buyback: IT major announces ₹12,000 crore buyback; here are 10 key points to know
- Wipro Share buyback: This buyback is the most-anticipated in the current year. The IT-giant announced a buyback plan of ₹12,000 crore at a floor price of ₹445 per equity share. This would be the company's first buyback in over two years.
Wipro Buyback: IT-giant Wipro has announced a buyback plan of a whopping ₹12,000 crore on Thursday. The would be Wipro's first buyback in over two years. The company has fixed a floor price of ₹445 per equity share. However, details such as record date, timeline, and others will be announced in due course. The company posted a mixed performance in the fourth quarter of FY23.
The last buyback of Wipro was of ₹9,500 crore carried between December 29, 2020, to January 11, 2021. During this buyback, Wipro tendered 22,89,04,785 equity shares --- accounting for 96.38% of the total buyback size --- aggregating to ₹9,156 crore. Prior to this, Wipro had launched a buyback program of ₹10,500 crore between August 14 to August 28 of 2019.
Here are 10 key highlights of the Wipro's buyback:
1. Wipro's board members have approved a proposal to buyback up to 26,96,62,921 equity shares, being 4.91% of the total paid-up equity shares of the company -- aggregating to ₹12,000 crore.
2. The floor price for the buyback is set at ₹445 per equity share. The floor price is at a premium of 18.9% than compared to Wipro's current market price. On Thursday, Wipro's share price closed at ₹374.35 apiece on BSE.
3. Members of the promoter and promoter group of the company have indicated their intention to participate in the buyback offer.
4. Proposed buyback is now subject to approval of shareholders by way of a special resolution through a postal ballot.
5. Wipro will announce the process, record date, timelines and other details of the buyback in due course.
6. Wipro promoters shareholding: As of March 31, 2023, promoter and promoter group holds over 400.19 crore equity shares or 72.92%. Some of the promoter names are Azim Premji, his wife Yasmeen, and two sons Rishad and Tariq.
7. Domestic institutional shareholders such as Indian financial institutions, banks and mutual funds together hold 15.04 crore equity shares or 2.74% in Wipro. On the other hand, foreign investors hold about 53.67 crore equity shares or 9.78% in Wipro.
8. Additionally, Indian public, corporates and others hold 79.89 crore equity shares or 14.56% in the tech giant.
9. In Q4FY23, Wipro posted a consolidated net profit of ₹3,074.5 crore, while revenue stood at ₹23,190.3 crore. The tech player's operating cash flows at 120.6% of Net Income for the quarter was at ₹37.3 billion -- a rise of 60% YoY. Read full quarter earnings report here!
10. For full year FY23, Wipro's PAT is around ₹11,350 crore down by 7.2% from ₹12,229.6 crore in the previous fiscal. However, revenue jumped by 14.40% to ₹90,487.6 crore in FY23 as against ₹79,093.4 crore witnessed in FY22. Also, IT Services segment revenue increased to $11,159.7 million, an improvement of 7.8% YoY.
Typically, the buyback is expected to improve return on equity through the distribution of cash and improve earnings per share by a reduction in the equity base in the long term, thereby leading to a long-term increase in members’ value. Also, the buyback gives an opportunity to shareholders to increase their percentage of holding in the company.
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