Wipro Buyback – Retail Investors Should Know Buyback Here is all the Details.
Overview
Wipro is India’s 4th largest IT Company by market capitalization. The company harnesses the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help its clients adapt to the digital world and make them successful. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship. The company began its business as a vegetable oil manufacturer in 1945 at Amalner, a small town in Western India and thereafter, In the 1990s, the company leveraged its hardware R&D design and software development expertise and began offering software services to global clients.
| Buyback price | 400/- Per Share |
| Buyback Record Date | 11-Dec-2020 |
| Total Buyback Value | 9,500 Cr |
| Total Buyback Share | 23,75,00,000 |
| Buyback type | Tender Offer |
Buyback Details:
On October 13, 2020 and November 17, 2020, Company informed to the stock exchanges that the Board of Directors and Shareholders of Wipro have approved the proposal of the Company to buyback of 23.75 Cr share out of which 15% Buyback share are reserve for retail investor. The aggregate amount of buyback is Rs. 9,500 Cr, being 4.16% of the total paid-up equity share at a price of Rs. 400/- per share. Company offering 11.10% premium to investor as of current market price of Rs 360.00 on 04th December.
How to participate in buyback?
- For eligibility criteria, Investor should carry the share of Wipro in his Demat account as on record date of 11th December
- After the record date company will announce tender offer period where you can tender your share through your broker for participating in the buyback process
- Once the share are tendered, that share will be debited from your Demat account and any offer of share tenders which are made over and above the acceptance ratio of the company will be credited back to the applicant’s Demat account
- Then on pre-determine date the payment will be credited to your bank account for accepted shares
Profit from Buyback as per Acceptance ratio
| Share | CMP | Buyback Price | Acceptance Ratio | Accepted Share | Profit on buyback | Profit In % |
| 500 | 360 | 400 | 70% | 350 | 14000 | 7.78 |
| 500 | 360 | 400 | 60% | 300 | 12000 | 6.67 |
| 500 | 360 | 400 | 50% | 250 | 10000 | 5.56 |
| 500 | 360 | 400 | 40% | 200 | 8000 | 4.44 |
Retail Investor who is looking for opportunity for short term period can buy share of Wipro of up to 200,000 rupees as on record date and can participate in tender offer of the company. We are expecting the acceptance ratio to be range between 40%-70% and could give potential return of 4.5%-8%. The potential return could come with a time period of two-three month. However there is an also risk involve where investor have to sell unaccepted share in an uncertain price but if carry it for longer period than they could enjoy good return in remaining share due to a healthy fundamental.
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