Wipro to buyback shares worth Rs 2,500 crore

Wipro to buyback shares worth Rs 2,500 crore

Wipro to buyback shares worth Rs 2,500 crore

In a bonanza to its shareholders, country's third largest IT firm Wipro today said it will buyback up to four crore shares worth around Rs 2,500 crore.

This represents 1.62 per cent of the total paid-up equity capital aggregating to 4 crore shares at a price of Rs 625 per share. Wipro stock today closed at Rs 601.35 apiece, up 2.07 per cent from its previous close on the BSE.

"The cash we have on our balance sheet... we have always looked at opportunities where we could return the cash to shareholders and it goes towards our objective of striving towards more value to our shareholder," Wipro CFO Jatin Dalal said.

The buyback is proposed to be made from all existing shareholders of the company, including persons who become shareholders by cancelling American Depository Receipts and receiving underlying equity shares.

Members of the promoter and promoter group of Wipro have indicated their intention to participate in the proposed buyback. Promoters held 73.35 per cent stake in the company as of December 31, 2015, as per the shareholding pattern on the BSE.

Asked about the timeline, Dalal said: "There is nothing specific to the timing, I think this is right timing as good as any other time."

"The board feels comfortable at Rs 625 which is our price and if you look at the 60-day average price before our intimation to the stock exchange last week, that will translate into maybe about 15-16 per cent premium on that number. So, I think it is good effective price for anybody who holds Wipro's share to take advantage of this buyback process," he added.

Wipro's gross cash at the end of the March 2016 quarter was Rs 30,143 crore or approximately USD 4.55 billion.

"In our net cash, we have roughly USD 1.9 billion of net on the balance sheet, so the net cash on the books is something like USD 2.7 billion. So, we remain in a good position from the capital structure and funding and cash availability standpoint for us to make investment which may be of our strategic priority," Dalal said.

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