Wipro drops as stock trades ex-date for share buyback today

India’s third largest IT company, Wipro, is currently trading ex-date for its share buyback offer. The buyback announced by Wipro Limited is set for a record date of June 16, 2023, with a significant total offer size not exceeding Rs 12,000 crore. Shares of the IT major are already down by over 1 per cent, as investors offloaded the company’s stock on the record date.

Shares of Wipro were trading 1.21 per cent lower at Rs 384.25 apiece on BSE at 11:51 AM.  

Share Buyback: A Win-Win for Investors

Wipro announced a share buyback for 2023 with a record date of June 16. The buyback will be conducted via the Tender Offer route at a price of Rs 445 per equity share, with a total offer size not exceeding Rs 12,000 crores. The buyback offer price presents a premium of 15.9 per cent over the current trading price. Around 15 per cent or 4 crore shares in the buyback are reserved for retail investors, i.e. investors holding less than Rs 2 lakh worth of shares each. 

Despite some analysts projecting a negative outlook on the stock, the buyback announcement indicates Wipro's strong belief in its own growth potential. Several analysts have also advised investors to take part in the share buyback offer due to the high premium. Analysts estimate the acceptance ratio to be between 40-60 per cent as the company’s last buyback offer saw almost 100 per cent acceptance. 

Investors should note that as the record date for the buyback offer is June 16, they won’t be able to purchase the company’s shares today to take part in the scheme as the Demat settlement will not be completed in time. 

5G Def-i innovation centre opening in Texas 

Wipro recently announced that it has opened a new 5G Def-i Innovation Centre in Austin, Texas. The centre is designed to assist clients in realizing the advantages of 5G technology through secure and compliant products and services. The Texas facility will be Wipro’s first testing facility in the US. 

“Our new 5G Def-i Innovation Center will bring together world-class engineers and researchers, facilitating collaboration with partners and stakeholders to help realize the full potential of 5G," said Lourdes Charles, Vice President, 5G Connectivity Services, Wipro Limited.

Leveraging Wipro's 5G Def-i platform, the center offers integrated services for product qualification, compliance, pre-certification, and interoperability testing. With an environment that simulates real-world conditions, the center is positioned to optimise the performance of 5G networks and devices. The center will also focus on collaboration, research and development, and incubation for future innovation.