The board of IT major Wipro on Thursday approved the proposed share buyback of up to Rs 15,000 crore through the tender offer route. This is the firm’s largest buyback exercise, and its first since 2023, when it bought back nearly 270 million shares for Rs 12,000 crore.
Under the proposal, the company will buy back up to 600 million fully paid-up equity shares of face value Rs 2 each at a price of Rs 250 per share. The proposed buyback represents 5.7 per cent of the total paid-up equity share capital.
“The proposed Buyback is subject to approval of shareholders by way of a special resolution through a postal ballot,” Wipro said in an exchange filing.
The proposed buyback price is at a 19% premium to Thursday’s closing price of Rs 210.2 per share on the Bombay Stock Exchange.
Regulatory Framework
The buyback will be undertaken from existing shareholders on the record date on a proportionate basis, in line with the Securities and Exchange Board of India’s Buy-Back of Securities Regulations, 2018, and the Companies Act, 2013. The offer will also be open to persons who become shareholders by cancelling American Depository Receipts and receiving the underlying equity shares.
The company said the Rs 15,000 crore buyback size excludes transaction-related expenses such as brokerage, taxes, filing fees, advisory charges, public announcement costs, printing and dispatch expenses, and other incidental charges.
“Members of the promoter and promoter group of the Company have indicated their intention to participate in the proposed Buyback,” Wipro said in a disclosure to the exchanges.
The company has also constituted a committee to oversee and implement the process. Details relating to the postal ballot, record date, timelines and the letter of offer will be announced in due course.
Sector-Wide Trends
During its fiscal fourth quarter earnings call, Wipro chief financial officer Aparna Iyer said that the buyback is to give returns to shareholders from the excess cashflows. The firm said operating cash flow for FY26 was 112.6% of net income. Iyer said that even after the buyback Wipro will have a war chest to fund growth initiatives like acquisitions.
Over the past few years, Indian IT giants like Wipro and peers Infosys, HCLTech and Tata Consultant Services (TCS) have all tapped the buyback route.
In September last year, the Infosys board approved a share buyback of up to Rs 18, 000 crore, its largest ever, and first in three years.
Through the repurchase the company bought back 100 million fully paid-up equity shares of face value Rs 5 each, representing 2.41% of the existing paid-up share capital. The buyback price was Rs 1,800 per share, a premium to the stock’s then trading range of Rs 1,450 per share to Rs 1,550 per share.
TCS concluded a Rs 17,000-crore buyback in December 2023 at Rs 4,150 per share.