Wipro has received approval from the Securities and Exchange Board of India (SEBI) to launch a share buyback programme. The IT major said it’s up to Rs 9,500-crore share buyback offer will commence on 29 December and end on 11 January 2021.
“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.
Last month, shareholders had approved Wipro’s buyback plan for the purchase of up to 23.75 crore equity shares at Rs 400 per share, aggregating to an amount of up to Rs 9,500 crore.
Wipro will send the Letter of Offer to the investors on or before 26 December 2020, Wipro said in a regulatory filing.
The last date for settlement of bids on the stock exchange would be on or before January 20, 2021.
Wipro’s 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 started on December 18 and is slated to close on 1 January 2021.
What is share buyback?
Share buyback 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. In such a situation, the price of concerning shares is higher than the prevailing market price.
Also Read: Top 7 investment options to boost your wealth
Should you tender your shares in the repurchase programme?
Analysts say the stock is unlikely to see a significant jump in the interim period as Wipro, along with other IT stocks, have risen quite well from the March 2020 lows. Hence, one can consider tendering their shares in the buyback offer.
Wipro had last year announced a share buyback of 32.31 crore shares at Rs 325 apiece, aggregating ₹10,500 crore, and comprising 3.69% of its total paid-up equity capital. The IT major had previously announced a buyback worth ₹11,000 crore in 2017, and ₹2,500 crore in the year 2016.
Unified Pension Scheme (UPS): How it differs from NPS and OPS
RBI to lenders: Stop charging compound penal interest on loans
Why women must take care of their finances