Wipro Gains as Leading IT Company Sets Record Date for Share Buyback
Wipro, the prominent IT services company headquartered in Bengaluru, witnessed a surge in its stock value on June 12. This came after the announcement that June 16 has been designated as the record date for the company’s substantial Rs 12,000-crore share buyback initiative. Since the buyback plan was unveiled on April 27, Wipro’s stock has experienced a growth of over 8 percent.
At 11:20 am, the stock was trading at Rs 397.40 per share.
In its official filing, Wipro stated, “The company has officially scheduled June 16, 2023, as the record date for determining the eligibility of equity shareholders to participate in the buyback and determining their entitlement.”
Approximately 15 percent or 4 crore shares have been allocated for retail investors who hold shares valued below Rs 2 lakh. Shareholders with up to 449 shares are classified as small shareholders and are eligible for the buyback at a price of Rs 445 per share.
The third-largest software exporter in India had previously established a floor price of Rs 445 per equity share for the buyback, encompassing up to 269,662,921 shares, equivalent to 4.91 percent of all equity shares. This floor price represents a 9.8 percent increase over the current market price.
For the fourth quarter of FY23, Wipro disclosed a slight 0.4 percent year-on-year decline in its consolidated net profit, amounting to Rs 3,075 crore compared to Rs 3,087 crore from the previous year. However, its consolidated revenue from operations increased by 11.2 percent to Rs 23,190 crore, surpassing the Rs 20,860 crore recorded in the previous year.
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Wipro anticipates a decline in constant currency revenue for the current quarter, ranging from 3 percent to 1 percent. Despite these figures falling short of expectations, the announcement of the buyback has bolstered the stock price.
Nevertheless, analysts have adopted a more pessimistic stance towards the stock. Motilal Oswal Financial Services is waiting for additional evidence of Wipro’s successful execution of its revamped strategy and a triumphant recovery from its difficulties over the past decade before expressing a more positive outlook.
According to Bloomberg, there are currently 17 buy, 12 hold, and 12 sell recommendations for Wipro’s stock, with a 12-month target price set at Rs 390. This indicates a potential 3.7 percent downside from the current level.
About Wipro:
Wipro, a prominent Indian multinational corporation, specializes in offering a wide range of information technology, consulting, and business process services. Recognized as one of the top Big Tech companies, Wipro has established itself as a key player in the industry.
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