Wipro, India’s third largest IT services firm, has announced its buyback plan at Rs 320 a share.
The company said it would buyback up to 343.75 million fully paid-up equity shares representing 7.06 per cent of the total paid-up equity share capital at a price of Rs 320 ($ 4.971) totalling up to Rs 11000 crore.
“The buyback will be conducted on a proportionate basis through the “tender offer” route,” said the company in a statement.
Wipro is the latest among large technology firms that is offering cash back to shareholders. Infosys is returning around Rs 13,000 crore to buy nearly 5 per cent of stock from shareholders, while India’s largest services firm Tata Consultancy Services saw its buyback oversubscribed.
Last month, the Bengaluru-based firm had said it will purchase up to 343.75 million shares at Rs320 ($4.95) per scrip. The total size of the offer will be up to Rs11,000 crore ($1.7 billion).
“The aforesaid special resolution has been passed through postal ballot and e-voting by members by requisite majority,” Wipro said in a filing to the BSE.
The voting, which ended on 28 August, saw 99.68% of the votes being cast in favour of the buyback offer. Wipro was trading marginally higher at Rs291.40 on the BSE.
Share buybacks improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market conditions.
As on 30 June 2017, Wipro had ‘cash and cash equivalents’ of Rs5,432 crore on its books and ‘investments’ of Rs31,772 crore, totalling Rs37,204 crore.
Among Indian IT companies, TCS, which had a cash kitty of over Rs43,000 crore, has already completed a Rs16,000 crore buyback programme earlier this year.
Infosys has also announced a buyback offer of up to Rs13,000 crore ($2 billion) to be paid out to shareholders during the financial year 2018.
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