Wipro, the leading Indian IT services company, on Tuesday said it has received approval from capital market regulator SEBI to launch share buyback programme. Wipro proposes to return around Rs 9,500 crore to shareholders via share buyback which will commence on December 29, 2020 and close on January 11, 2021.
The IT major plans to buy back up to 23.75 crore shares, representing 4.16 per cent of total paid-up equity share capital of the company, at a face value of Rs 2 each at a price of Rs 400 per share.
"This is to inform you that the company received final comments from the Securities and Exchange Board of India (SEBI) on December 21, 2020, with respect to the draft letter of offer filed by the company for the captioned buyback," Wipro said in a filing to the Bombay Stock Exchange.
The Bangalore-based company said that it will now send letter of offer to eligible shareholders about the buyback on or before December 26. The company had set the record date for determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback on December 11, 2020.
"Pursuant thereto and in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, the company will dispatch the letter of offer to eligible shareholders (i.e. equity shareholders of the company as on the record date of Friday, December 11, 2020), on or before December 26, 2020," it said.
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The shareholders of Wipro had approved the share buyback proposal on November 17, 2020, a month after its board approved the plan. The voting, which started on October 18 and ended on November 16, saw 99.78 per cent of the votes being cast in favour of the buyback offer. There was 100 per cent voting in favour of the proposal by the promoters, 98.73 per cent by public institutional shareholders, and 98.49 per cent by public non-institutional shareholders.
Last year, Wipro had undertaken a buyback programme of 32.31 crore shares at Rs 325 apiece, amounting to about Rs 10,500 crore. Previously, it had announced a buyback worth Rs 11,000 crore in 2017, and Rs 2,500 crore in the year 2016.
Ahead of the announcement, shares of Wipro closed trade at Rs 364, up 2.62 per cent, against the previous closing price of Rs 354.70 on the BSE.
Wipro's larger rival Tata Consultancy Services (TCS) has also proposed a Rs 16,000 crore buyback plan at Rs 3,000 per equity share. The share buyback programme will commence on December 18 and close on January 1, 2021.