Tech major Wipro Ltd has announced June 16, 2023, as the record date for a share buyback worth ₹12,000 crore, marking the fifth share buyback in the IT services company's history. The buyback has been approved at a price of ₹445 per equity share, around 10% higher than its current price of ₹405.

"The Board of Directors of the Company and shareholders of the Company, respectively, have approved the proposal to buyback up to 26,96,62,921 equity shares (Twenty Six Crore Ninety Six Lakh Sixty Two Thousand Nine Hundred and Twenty-One only) fully paid-up equity shares of the Company of the face value of Rs.2/- (Rupees two only), for an aggregate amount not exceeding Rs. 120,00,00,00,000/- (Rupees Twelve Thousand Crores only), each at a price of Rs. 445/- (Rupees Four Hundred and Forty-Five only) per equity share on a proportionate basis through the tender offer process," Wipro informed via stock exchange filing.

Post the buyback announcement, shares of Wipro dipped 1.82% to ₹396.95 on the Bombay Stock Exchange (BSE). The stock opened at ₹404, down from yesterday's close, and soon fell to an intra-day low of ₹395.70. At the current share price, Wipro's m-cap stands at ₹2.17 lakh crore.

The buyback size constitutes 20.95% and 17.86% of the aggregate of the fully paid-up equity share capital and free reserves of the company as per the latest audited balance sheet, respectively, as of March 31, 2023.

The buyback will be conducted on a proportionate basis through the “tender offer” route as per the Securities and Exchange Board of India (Buy Back of Securities) Regulations and the Indian Companies Act, 2013, the company said.

"The buyback size does not include any transaction costs viz. brokerage, applicable taxes such as buyback tax, securities transaction tax, GST, stamp duty, expenses incurred or to be incurred for the buyback like filing fees payable to the Securities and Exchange Board of India, advisors/legal fees, public announcement publication expenses and other incidental and related expenses, etc. Buyback tax does not form part of the buyback size and will be appropriated out of the free reserves of the company," it added.

Wipro says for a holder of American Depositary Shares (ADSs) to participate in the buyback, such a holder will need to become a direct shareholder of the company prior to the record date. The company’s ADSs, each representing one equity share, are traded in the U.S. on the New York Stock Exchange (“NYSE”).

"To have the chance to become a direct shareholder of the company prior to the record date, holders of ADSs will need to submit their ADSs to JPMorgan Chase Bank, N.A., as ADS depositary (the “Depositary”) for cancellation and withdrawing the underlying equity shares, no later than 12:00 noon New York City time on June 13, 2023, so they are holders of equity shares as of the record date."

Wipro also said to cancel ADSs, the holders of ADSs must comply with all of the provisions governing the ADSs, including without limitation, payment of all fees, charges, and expenses owing.

The country’s third-largest software services company reported a 0.4% year-on-year drop in its fourth-quarter net profit. On a sequential basis, profit rose 0.7% to ₹3,074 crore in Q4. The gross revenue rose 11.2% year-on-year to ₹23,190 crore for the January-March quarter. Revenue from IT services increased 3.7% to $2.8 billion in Q4 2022-23.

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