Wipro announces Rs 12,000-crore share buyback at Rs 445 per share

Wipro on Thursday said it intended to buy back about 4.91 per cent of its share in a Rs 12,000-crore plan. The IT company also said the total outlay for the buyback, including taxes, will be $1.8 billion (Rs 14,800 crore).

The buyback price per share has been set at Rs 445. The price per share is at a premium of 18.8 per cent. The current price per share of the company was at Rs 374.35.

Explaining the rationale of the buy back, Jatin Dalal, president & CFO, Wipro, said, “We have a policy of returning 45-50 per cent of the net income over a block of three years to our shareholders. The board felt we have sufficient headroom from the accumulated cash on the balance sheet perspective. That’s the overall context.”

At the end of the year, Wipro had $3.1 billion net of cash. “We have sufficient flexibility and liquidity to pursue the inorganic pursuits,” Dalal said during the media briefing.

According to the regulatory filing, members of the promoter and promoter group of the company will also be participating in the proposed buyback. The buyback is proposed to be made from the existing shareholders of the company (including persons who become shareholders by cancelling American Depository Receipts and receiving underlying equity shares) as on the record date on a proportionate basis under the tender offer route in accordance with the provisions contained in the Securities and Exchange Board of India (buyback of securities) Regulations, 2018 (“Buyback Regulations”) and the Companies Act, 2013 and rules made there under. The buyback is subject to shareholder approval.

Wipro initiated a buyback programme in 2020 worth Rs 9,500 crore. In January 2021, the company announced that it has completed the buyback and in a regulatory filing said, “Rs 23.75 crore equity shares were bought back under the buyback, at a price of Rs 400 per equity share... The total amount utilised in the buyback is Rs 9,500 crore.”