IT major Wipro has announced its latest and largest share buyback program, inviting its shareholders to tender their shares at a premium price. With a total issue size of Rs 12,000 crores and a buyback price of Rs 445 per share, this guide provides a comprehensive, step-by-step guide for shareholders on how to participate in the buyback process.

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Wipro's buyback offer will open on June 22 and close on June 29. The buyback price is set at Rs 445 per share with a total buyback size of Rs 12,000 crores. The company plans to buy back a total of 26.96 crore shares. Within the retail category, 4 crore shares will be bought back with a total buyback size of Rs 1800 crores. For every 265 shares in the retail category, 26 shares will be accepted, indicating an entitlement ratio of 23.4 per cent.

Investors possessing 515 shares, according to the closing prior to the record date, are eligible to tender shares in the retail category. It is estimated that the acceptance ratio for this buyback will be at least 50 to 60 per cent. In three out of the past four buybacks, the acceptance ratio was 100 per cent.

Looking at the historical buyback price and size, Wipro has consistently conducted buybacks since 2016. In 2016, the buyback size was Rs 2500 crores with a price of Rs 625. In 2017, the size increased to Rs 11,000 crores with a price of Rs 320. In 2019, the buyback size was Rs 10,500 crores at a price of Rs 325 and in 2020, the size was Rs 9,500 crores with a price of Rs 400.

Analysts suggest tendering in the buyback due to the recent slump in the stock. The one-year return is down 9.3 per cent, but the 6-month return is up 2.1 per cent, and the 3-month return is up 6.7 per cent. The acceptance ratio and profits range from 7.3 per cent at a 50 per cent acceptance ratio to 14.6 per cent at a 100 per cent acceptance ratio.

Understanding the Wipro buyback

Share buybacks are a common way for companies to return surplus cash to their shareholders. In Wipro's case, the buyback represents a premium of 15.3 per cent over the market price. This provides an opportunity for the shareholders to sell their shares at a premium directly to the company.

Eligibility

The eligibility to participate in the buyback is determined by the "record date" which, in this case, is set for June 16, 2023. All shareholders who held Wipro shares on this date can participate in the buyback.

Steps to tender Wipro shares

Check the Buyback Details: Ensure you have all the correct information about the buyback – including dates, price per share, and the total number of shares Wipro intends to buy back.

Consult with Your Stock Broker: Once you have the details, reach out to your stockbroker and express your intent to participate in the buyback. The broker can guide you through the process, whether your shares are held electronically or in physical certificates.

Transfer Your Shares: If your shares are held electronically in a Demat account, you'll need to transfer  them back to your trading account. Your broker will assist you in this process.

Fill Out the Buyback Form: Once your shares are in your trading account, this involves filling out a buyback form with your details and the number of shares you want to sell.

Wait for Acceptance: Once your request has been submitted, Wipro will verify the details and decide on the number of shares to accept. If accepted, the payment will be processed directly into your bank account.

Who can participate

In general, all shareholders who held Wipro shares on the record date are eligible to participate in the buyback. These include both small and large retail investors, as well as institutional investors. The number of shares you can tender in the buyback depends on the number of shares you owned on the record date. This includes shareholders who own shares in a Demat account or in physical form.

What is the record date?

The record date is a key date set by the company announcing the buyback. It is used to determine which shareholders are eligible to participate in the buyback. In Wipro's case, the record date for the current buyback is June 16, 2023. If you were holding Wipro shares on this date, you're eligible to participate in the buyback. It's important to note that you should not sell your shares after this date until the buyback completion, or you will lose your eligibility.

Details to fill in the tender form

The tender form is the document you fill out to participate in the share buyback. Here are the details that you usually need to provide:

Shareholder Details: This includes your full name, address, and contact information. If the shares are jointly held, the details of all joint holders must be provided.

Demat Account Details: If your shares are held in a Demat account, you will need to provide your Depository Participant ID and Client ID.

Share Details: This includes the number of shares you wish to tender in the buyback. You also need to sign a declaration confirming that the shares are free from any lien, encumbrance, or any other charges.

Bank Details: You need to provide your bank account details for receiving the buyback consideration. Make sure to provide the IFSC code, account number, and the name of the bank and branch.

After filling out the form, submit it to your broker or directly to the company's registrar. Find the form here

It's always a good idea to keep a copy of the filled form for your records.