The Board of Directors of Wipro has approved buyback of equity shares worth Rs 12,000 crore from shareholders. Buyback of shares is one of the ways companies reward their shareholders.
The company plans to buy up to 26,96,62,921 equity shares – being 4.91 percent of total number of equity shares on a proportionate basis by way of a tender offer at a price on Rs 445 per equity share.
The buyback price is at a premium of nearly 19 percent to the last traded price of Wipro.
Members of the promoter and promoter group of the company will also be participating in the proposed buyback.
The buyback size does not include transaction costs viz. brokerage, applicable taxes such as buyback tax, securities transaction tax, GST, stamp duty, any expenses incurred or to be incurred for the buyback like filing fees payable to the Securities and Exchange Board of India, advisors/legal fees, public announcement publication expenses and other incidental and related expenses.
Wipro added that the proposed buyback is subject to approval of shareholders by way of a special resolution through a postal ballot. The process, record date, timelines and other details will be communicated in the public announcement and the letter of offer, to be published in accordance with the Buyback Regulations.
Interestingly, the buyback price despite being at a premium, is far below the 52-week high price of Rs 530. Thus, those investor who bought the stock when it was making highs, the buyback will not be providing a profitable exit.
Wipro closed at Rs 374.35 on BSE.
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