The board of IT services company Wipro has announced a share buyback of Rs 9500 crore today. According to this plan, the company will buy back shares worth 23.75 crore at the rate of Rs 400 per share. Today, shares of Wipro fell by Rs 1.80 to close at Rs 375.75 per share on Tuesday. It touched an all-time high of 381.70 in intraday trade today. Wipro will buyback shares worth 9500 crore, which is 4.16 percent of the total paid-up equity share capital of Wipro on 30 September.
Investors have a chance of 6.6 percent return
Shares of Wipro closed at Rs 375.75 on Tuesday and the company will buy back the stock at a price of Rs 400, thus investors can get a profit of around Rs 25 on each stock as per Tuesday’s price. If an investor bought shares at a closing price on Tuesday, he would get a return of 6.6 percent.
Buyback of 33.3 million shares last year
Earlier, Wipro had bought 33.3 crore shares last year at a price of Rs 325 per share. The total value of this buyback was 10,500 crore and it was 3.69 percent of its paid-up equity capital.
A few days ago TCS also announced a buyback
The country’s largest IT company Tata Consultancy announced a share buyback a few days ago with the results announced. TCS had announced a buyback of 5,33,33,333 shares worth Rs 16,000 crore at the rate of Rs 3,000 per share. This was about 1.55 per cent of the company’s market capitalization.
Effect on share price by buyback
When a company gets more cash, it buys back its shares in the market. It is a buyback when the company buys its own shares from investors. This reduces the number of shares of the company present for trading in the stock market and increases the share earnings (EPS) and PE. However, this does not change the business of the company.
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