Wipro gains after shareholders approve Rs 11,000 cr buyback proposal

Shares of Wipro gained nearly 2% on Thursday in an otherwise weak market after country’s third-largest software services firm said its shareholders have approved the company’s Rs 11,000 crore buyback proposal.

The stock added as much as 1.8% to Rs 297 on the BSE against 0.2% fall in the Nifty IT index.

Last month, the Bengaluru-based firm had said it will purchase up to 34.37 crore shares at Rs 320 ($4.95) per scrip. The total size of the offer will be up to Rs 11,000 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 Rs 5,432 crore on its books and ‘investments’ of Rs 31,772 crore, totalling Rs 37,204 crore.

Among Indian IT companies, TCS, which had a cash kitty of over Rs 43,000 crore, has already completed a Rs16,000 crore buyback programme earlier this year.

Infosys has also announced a buyback offer of up to Rs 13,000 crore ($2 billion) to be paid out to shareholders during the financial year 2018.

(With inputs from PTI)