Mega IT share buybacks: Wipro investors make a beeline to exit door, Infosys shareholders stay put

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Published: December 4, 2017 5:18:46 PM

Infosys and Wipro, the two I-T giants announced last week announced buybacks offering to collectively return as much as up to Rs 24,000 crore in cash to small and large investors, however, after nearly five days, the data show that investors of Wipro are exiting the company at a faster rate than that of Infosys.

Bombay Stock Exchange. (Image: Wikimedia Commons)

Infosys and Wipro, the two I-T giants announced last week announced buybacks offering to collectively return as much as up to Rs 24,000 crore in cash to small and large investors, however, after nearly five days, the data show that investors of Wipro are exiting the company at a faster rate than that of Infosys.

According to latest data on NSE, Wipro, which opened its mega share Rs 320 buyback, on November 29, got subscribed 2.38 times, while Infosys Rs 1,150 buyback, which opened a day later, got subscribed 0.23 times. The two-week long share repurchase programmes running until 14 December will improve both companies’ earnings per shares by providing them with an opportunity to return unutilised and surplus cash to shareholders. Infosys’ share buyback is the first in the company’s 36-year long history, while Wipro’s offer follows another large share buyback of Rs 2,500 crore that it did in May 2016.

Infosys’ share repurchase is managed by Kotak Mahindra Capital Company and JPMorgan India while Wipro’s buyback is managed by JM Financial Institutional Securities. Earlier in May 2017, India’s largest IT firm Tata Consultancy Services completed its share repurchase worth Rs 16,000 crore, making it the largest ever share buyback in Indian corporate history.

To the investors looking to cash out, it offers tempting opportunities either in the buyback program or in the secondary market. We take a brief look at the buybacks of TCS, Infosys and Wipro.

This table shows India’s three largest information technology companies’ share buybacks at a glance.

Parameter/CompaniesInfosysWiproTCS
Start date30-Nov-201729-Nov-201718-May-2017
End date13-Dec-201714-Dec-201731-May-2017
Record date1-Nov-201715-Sep-20178-May-2017
Buyback size (Rs crore)13,00011,00016,000
Number of shares (crore)34.3711.35.61
% of Paid up capital (%)20.517.062.85
Face value (Rs)521
Buyback price (Rs)1,1503202,850
Current market price (Rs)961.35294.62,704.65
Premium at CMP (%)19.628.6213.7*
Market Cap (Rs crore)1,43,372.712,20,821.455,17,747.79

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