Wipro Announces Rs 15,000 Crore Share Buyback at Rs 250 Per Share

IT services major Wipro has announced a Rs 15,000 crore share buyback at Rs 250 per share, with brokerages advising investors to buy the shares of the company to participate in the buyback, citing multiple reasons. The buyback price implies a premium of more than 25% over the stock's previous closing price of Rs 199.36 apiece on NSE. This is Wipro's first buyback announcement in nearly three years. Wipro's board approved the plan to buy back up to 60 crore shares, representing 5.7% of the total paid-up share capital, for an aggregate amount not exceeding Rs 15,000 crore. The buyback will be done via the tender route, and all shareholders on the record date, including those who received the equity shares after cancelling their American Depository Receipts (ADR), will be eligible to take part in the corporate action. Wipro said that promoters and promoter groups have indicated their intention to participate in the proposed buyback. The record date to determine shareholder eligibility, acceptance and entitlement ratio and other details are yet to be announced. Taking Wipro's previous buyback trends and a relatively lean retail shareholding pattern into consideration, HDFC Securities came up with two investment scenarios. On the conservative side, the domestic brokerage assumed a relatively lower acceptance ratio than the previous offer, that is around 45-50%. "This presents a compelling short-term opportunity for retail investors, offering a potential return (net) of 8-9% over a duration of 2–3 months," it said. On the aggressive side, HDFC Securities said that there is a strong quantitative basis to project a high retail acceptance ratio in the range of 70–80% (acceptance ratio was at 78% in 2023). It added that this presents a short-term opportunity for retail investors, offering a potential return (net) of 13–14% over a duration of 2–3 months. Motilal Oswal Wealth Management meanwhile said that retail investors looking for short-term opportunities can buy the shares of Wipro. "Based on the last two buybacks of Wipro and very low retail shareholding, we expect the acceptance ratio to remain high in the range of 50-60% which could give a potential return of 11-13% (pre-tax) with a time frame of 2-3 months," it added.