In its regulatory filing, Wipro said, "the Company has fixed Friday, December 11, 2020 as the Record Date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback."
Further, Wipro had said, in terms of the Buyback Regulations, under the tender offer route, the Promoter and Promoter Group have an option to participate in the Buyback. In this regard, the Promoter and Promoter Group entities and persons in control of the Company have expressed their intention to participate in the Buyback vide their letters dated October 13, 2020 and may tender up to an aggregate maximum of 4,14,54,12,501 Equity Shares or such lower number of Equity Shares under the provisions of the Buyback Regulations.
Of the total, Wipro intends to offer 15,22,82,702 equity shares to Azim Premji, 26,89,770 shares to wife Yasmeen A Premji, 17,38,057 shares to elder son Rishad Premji and 6,70,755 shares to younger son Tariq Premji.
Overall, Wipro will launch buyback offer of 23.75cr equity shares having a face value of Rs2 each at a floor price of Rs400 per share. The offer is payable in cash for an aggregate consideration of Rs9,500cr.
Here's why the byyback is being undertaken by Wipro as per the regulatory filing:
- To distribute surplus cash to its shareholders holding Equity Shares broadly in proportion to their shareholding, thereby enhancing the overall returns to shareholders;
- The Company believes that this reservation of up to 15% for small shareholders would benefit a large number of the Company’s public shareholders, who would be classified as “small shareholders”;
- Help in improving financial ratios like earnings per share and return on equity, by reducing the equity base of the Company; and
- Gives the Eligible Shareholders the choice to either (A) participate in the Buyback and receive cash in lieu of their Equity Shares which are accepted under the Buyback, or (B) not to participate in the Buyback and get a resultant increase in their percentage shareholding in the Company post the Buyback, without additional investment.
On Friday, Wipro was trading at Rs344.50 per piece up 0.54% on Sensex at around 10.10 am. The stock has touched an intraday high and low of Rs344.90 per piece and Rs342.10 per piece respectively.