In a statement, Wipro said that it planned to buy back up to 60,00,00,000 equity shares (being 5.7 per cent of total paid-up equity share capital) from the shareholders of the company on a proportionate basis by way of a tender offer at a price of Rs 250 (USD2.661 ) per equity share. The price is 19 per cent higher than Wipro’s closing price of Rs 210 on Thursday.
The share buy-back was proposed to be made from the existing shareholders of the company (including persons who become shareholders by cancelling American Depository Receipts and receiving underlying equity shares) as on the record date on a proportionate basis, the company said.
Members of the promoter and promoter group of the company had indicated their intention to participate in the proposed Buyback, it said.
The process, record date, timelines and other requisite details with respect to the buy-back would be set out in the public announcement. The company had formed a committee to oversee and implement the buy-back, it added.
Share buy-back or repurchase is the practice where companies decide to purchase their own share from their existing shareholders either through a tender offer or through an open market. When there is excess cash but not enough projects to invest in, companies go in for share buy-back. Also, share buy-back is a tax-effective way of rewarding shareholders. It will also help improve the valuation of the company.
