Wipro Limited`s Buyback of Shares in 2020

Code : FAC0058

Year :

Industry : Technology & Communications

Region : Asia

Teaching Note:Available

Structured Assignment : Not Available

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Introduction:In October 2020, Wipro Limited (Wipro), an Indian multinational corporation in the IT services space, announced a buyback of 238 million shares from existing shareholders on a proportionate basis through a tender offer . Out of these shares, the company aimed to buy back nearly 35 million shares from retail investors valued at less than Rs 0.2 million. Wipro’s decision to buy back shares was driven by its desire to push up the share price of the company and return the surplus cash in bank balances to the shareholders. Through the buyback, Wipro aimed to reduce the total number of outstanding shares and enhance the earnings per share (EPS) . Wipro offered an arbitrage opportunity for investors who held Wipro shares worth up to Rs 0.2 million as on the record date for the buyback. The offer was reserved for 15% of retail investors. Analysts were in favor of the buyback of shares, especially for retail investors. Analysts at ICICI Direct commented, “In this regard, we advise our clients to tender shares in the buyback, especially those clients who hold up to 500 shares.” ..

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