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Wipro Buyback
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The Board of Directors of Wipro Limited at its meeting held on October 13, 2020 has approved a proposal of third buyback along with the results of Q2FY21.

Buyback Details

 Buy Back Size (In Cr.)

9500

 Number of Shares (In Cr.)

23.75

 Buyback Offer Size

4.16%

 FV (In Rs.)

2

 Buyback Price (In Rs.)

400

 Closing on announcement day

375.75

 Premium

6.5%

 

 Q2 FY21 Performance Highlights

  1. Gross Revenue was Rs.151.1 billion ($2.1 billion) ), an increase of 1.4% QoQ and a decrease of 0.1% YoY
  2. IT Services Segment Revenue was at $1,992.4 million, an increase of 3.7% QoQ
  3. Non-GAAP2 constant currency IT Services Segment Revenue increased by 2.0% QoQ
  4. IT Services Operating Margin for the quarter was at 19.2%, an expansion of 0.2% QoQ and 1.1%YoY
  5. Net Income for the quarter was Rs.24.7 billion a decrease of 3.4% YoY
  6. Earnings Per Share for the quarter was at Rs.4.33 an increase of 0.7% YoY
  7. Operating Cash Flow was at Rs.44.1 billion which is 179.0% of Net Income

Financials

 (In Cr.)

2020

2019

2018

2017

2016

 Revenue

50,407.00

48,123.80

44,710.00

46,047.80

45,096.40

 Total  Income

52,883.60

50,692.40

47,189.60

48,617.80

47,460.60

 PBT

11,007.70

9,870.50

10,034.30

10,687.10

10,482.10

 Tax

-2,327.00

-2,256.50

-2,311.50

-2,525.40

-2,383.10

 Net Profit

8,680.70

7,614.00

7,722.80

8,161.70

8,099.00

 Equity

1,142.70

1,206.80

904.8

486.1

494.1

 EPS

14.88

12.67

16.26

33.61

32.97

 NPM %

17.22

15.82

17.27

17.72

17.96


Pre-Buyback shareholding pattern (as at October 9, 2020)

 Minimum Acceptance Ratio

 Shares Reserved for Retail (Cr)

3.56 (15% of 23.75)

 Total Retail Shares (Cr.)

13.56

 Minimum Acceptance Ratio Retail

26.2%

 Non - Retail  Sahres

20.19 (85% of 23.75)

 Minimum acceptance Ratio Non-Retail (Approx.)

3.6%

a) Investment should be less than equal to Rs. 2 Lacs to qualify as retail Investor

b) Final Acceptance ratio for retail and non-retail category is calculated as the ratio of Number of shares offered in each category divided by Total number of shares tendered in each category.

Overall the set price for buyback did not attract investors given the premium is just 6-6.5%. In the last two buybacks, the final acceptance ratio for the retail category was 1.2-1.5x the minimum acceptance ratio. Moreover company expects its cash reserves of $4.6 billion will reduce to $3 billion after the share buyback, while estimating that it will pay around Rs.2,500 crore in taxes for the buyback.

 

Disclaimer

The author may have positions in the stocks as mentioned in the article above, please assume us to be biased. This is not a recommendation to buy or sell securities. This is purely information about the company mentioned.  Equity investing contain risks and please consult your financial adviser for any buy and sell securities!

 

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