Promoter Interest Is Shown As Wipro Unveils A Rs. 12,000 Crore Buyback Programme
Leading IT company Wipro has unveiled its first repurchase program in more than two years, totaling 12,000 crores. The board of directors of the firm has authorized a proposal to repurchase up to 26,96,62,921 equity shares, or 4.91% of the company’s total paid-up equity shares, totaling 12,000 crores.
The buyback’s floor price, which represents an 18.9% premium over Wipro’s current market price of 374.35 per share, has been fixed at 445 rupees per equity share.
Through the distribution of capital, the buyback is anticipated to boost return on equity over time, as well as long-term earnings per share.
Shareholders must vote on a special resolution via mail to approve the proposed buyback. The procedure, record date, deadlines, and other specifics of the buyback will be disclosed by Wipro’s board members as they become available.
Members of the company’s promoter and promoter group have declared their desire to take advantage of the repurchase offer.
The proprietor and promoter group of Wipro owned more than 400.19 crore equity shares, or 72.92% of the firm, as of March 31, 2023. Azim Premji, his wife Yasmeen, and their two sons Rishad and Tariq are well-known promoters.
International investors have 53.67 crore equity shares, or 9.78% of Wipro, compared to domestic institutional shareholders, who hold 15.04 crore equity shares, or 2.74% of Wipro.
Domestic institutional shareholders include Indian financial institutions, banks, and mutual funds. The Indian public, corporations, and other investors hold 14.56% of the company’s equity.
Wipro reported a combined net profit for Q4FY23 of $3,074.5 billion against revenue of $23,190.3 billion. Operating cash flows for the IT company were $37.3 billion for the quarter, up 60% year over year and accounting for 120.6% of net income.
Wipro’s PAT for the entire fiscal year FY23 is around Rs. 11,350 crores, a 7.2% decrease from Rs. 12,229.6 crores in the prior year. Nevertheless, sales increased by 14.40% to 90,487.6 crores in FY23 from 79,093.4 crores in FY22. Additionally, IT Services segment revenue climbed by 7.8% YoY to $11,159.7 million.
Shareholders have the chance to raise their ownership stake in the company through the buyback. Long-term growth in the value of the members is anticipated as a result of the buyback’s decrease in the equity basis.
The repurchase is likely to increase return on equity and earnings per share by distributing money to shareholders.
Between August 14 and August 28, 2019, Wipro took out a repurchase program worth Rs. 10,500 crores.
This was followed by a buyback program worth Between December 29, 2020, and January 11, 2021, spending Rs. 9,500 crore. Wipro offered 22,89,04,785 equity shares as part of the second purchase, totaling $9,156 crore or 96.38% of the overall buyback size.
In summary, Wipro’s buyback program is anticipated to increase shareholder value over time. The company’s uneven fourth-quarter performance in FY23 is unlikely to have an effect on the buyback plan. The record date, timetable, and other specifics will be revealed when the time comes.
