Shares of Wipro Ltd jumped over 5%, its biggest intraday percentage gain since 19 January 2015 as the Indian IT major said on Friday that it would consider a share buyback proposal in the company’s board meeting which is scheduled on 20 July. However, the company didn’t disclose the size and price of the shares at which it is going to execute the transaction. Earlier this year, according to several media reports, Wipro’s buyback size would be pegged at Rs 2,500 crore.
Shares of Wipro went up 5.54% to its day’s high of Rs 273.9. According to analysts, the shares of Wipro are rising on the possible prospects of the undisclosed proposal of the buyback, Reuters reported. As on March 2017, Wipro had cash and cash equivalents totalling Rs 5,271 crore on its books.
“Wipro Ltd has now informed BSE that the Board will consider a proposal for buyback of equity shares of the Company on July 20, 2017,” the company said in a filing to the stock exchange on Friday. The company’s board meeting is scheduled to be held on 19 and 20 July 2017 where the main agenda would be the announcement of Wipro’s first quarter results for the financial year 2017-2018.
Earlier in June 2017, Wipro successfully completed the issue of bonus share in ratio 1:1, which was effective from 13 July.
If the proposed share buyback happens then Wipro will join the likes of Tata Consultancy Services, Infosys and Cognizant that had announced buyback offers to reduce surplus cash on their books and to return the same to their shareholders.
The Infosys board has already identified an amount of up to Rs 13,000 crore to be paid out to shareholders during the financial year 2018, through dividend and share buyback in its latest board meeting held on 14 July 2017. Earlier in May 2017, TCS had completed a 5.61 crore equity shares buy back for an aggregate amount not exceeding Rs 16,000 crore.