- Wipro board of directors have approved a share buyback plan of ₹9,500 crore plan to raise capital.
- Wipro will purchase 237.5 million shares at ₹400 a piece.
- The total buyback will account for 4.16% of Wipro’s total paid-up equity capital.
The shares account for around 4.16% of the total paid-up equity share capital, according to $4 with the stock exchange.
"You have to keep in mind that there is a tax outflow for the company which is roughly around ₹2,000 crore to ₹2,400 crore, on top of the ₹9,500 crore of buyback. And, therefore, we have thought through that. We’re transparent in our communication that this ₹9,500 crore comes directly to shareholders and tax is excluded on that," explained Dalal.
The buyback will be the company’s fourth in the last five years and the second by an Indian IT services company this fiscal year.
Despite the jovial news, Wipro saw its share price take a hit over 6% on as markets opened on October 14 and even $4. “We await further evidence of execution of Wipro’s refreshed strategy and a successful turnaround from its growth struggles over the past decade before turning more constructive on the stock,” said Motilal Oswal Securities.
Tata Consultancy Services (TCS) too $4 after its second quarter earnings last week. It plans to pick 53 million equity shares for ₹6,000 per share, amounting to 1.42% of TCS’ total paid-up equity capital.
A company is allowed to buy back shares up to 10% of its net worth without the approval of shareholders, according to the market regulator’s guidelines. With the requisite approval, it can buy up to a fourth of its net worth.
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