The final acceptance in retail quota, defined by those with investments less than Rs 2 lakh in the counter, has been finalised at 77.4%. For example, those who had 500 shares in Wipro and applied for buyback are eligible for 387 shares.
Investors who participated in the buyback will get their payment by July 7, and the unaccepted shares will also be returned to shareholders by the 7th of this month.
The record date of Wipro’s share buyback, which ran from June 22-30, was June 16. The share buyback price was fixed at Rs 445, while the closing price on the record date was Rs 381.30, implying a premium of 16.7%.
The Bengaluru-based IT major was supposed to buy back 26.97 crore shares, after which 4.91% of shares of the company will be extinguished.
In the last four buybacks, retail acceptance has been in the range of 50-100%, with 100% in three of them.
“The buyback is being undertaken by the company to return surplus funds to its equity shareholders, which are over and above its ordinary capital requirements and in excess of any current investment plans, in an expedient, effective, and cost-efficient manner,” Wipro had said earlier.Calculations done by the company show that after the buyback, the EPS will improve from Rs 20.73 to Rs 21.79, while the TTM PE will reduce from 17.75 to 16.89.
A study of Wipro’s past four buybacks shows that the stock has given mixed returns subsequently.
The next big trigger for the stock would be its June quarter earnings, the date of which is yet to be announced. Jefferies expects a revenue decline of 2% QoQcc – at the mid-points of its guidance range of 1-3% QoQcc degrowth.
“We expect Ebit margins to contract by 40 bps QoQ due to revenue decline. Deal bookings are to be supported by cost-takeout deals offset by slower decision-making. 2QFY24 guidance and overall demand commentary would be the key things to watch out for,” Jefferies said.
The brokerage sees the stock slipping toward Rs 320. Flat on a year-to-date basis, Wipro shares have lost around 27% in the last 2 years.
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