Wipro tops Sensex as shareholders approve Rs 11,000 crore share repurchase

By: | Published: August 31, 2017 11:12 AM

Wipro shares are leading the benchmark Sensex and helping the index to trim losses due to slump in shares of rival Infosys, TCS.

Wipro being into the top three contributors to Sensex gains, rose as much as 1.8% to the day?s high of Rs 296.9 on BSE.

Wipro shares are leading the benchmark Sensex and supporting the index to trim losses due to slump in shares of rival Infosys, TCS. The stock of India’s third-largest software services firm Wipro is the top gainer on the 30-share barometer today yesterday its shareholders have approved the company’s Rs 11,000-crore buyback proposal. The Bengaluru-based company has fixed September 15 as the record date for the buyback offer. Wipro being into the top three contributors to Sensex gains, rose as much as 1.8% to the day’s high of Rs 296.9 on BSE.

The company said last month that it will purchase up to 343.75 million shares at Rs 320 per scrip. The total size of the offer will be up to Rs 11,000 crore. “The aforesaid special resolution has been passed through postal ballot and e-voting by members by requisite majority,” Wipro said in an exchange filing. The voting, which ended on August 28, saw 99.68% of the votes being cast in the favour of the buyback offer. “The company has fixed September 15 as the record date for the purpose of determining the entitlement and the names of equity shareholders, who are eligible to participate in the buyback,” it said in a separate filing.

Share buybacks improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market conditions. As on 30 June 2017, Wipro had ‘cash and cash equivalents’ of Rs 5,432 crore on its books and ‘investments’ of Rs 31,772 crore, totaling Rs 37,204 crore. Earlier in June 2017, Wipro successfully completed the issue of bonus share in ratio 1:1, which was effective from 13 July.

Among Indian IT companies, TCS, which had a cash kitty of over Rs 43,000 crore, has already completed a Rs 16,000 crore buyback program earlier this year. The Infosys board has also identified an amount of up to Rs 13,000 crore to be paid out to shareholders during the financial year 2018.

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