The board of directors of IT services company Wipro approved today a value buyback proposal ₹9,500 crore. Wipro plans to buy 23.75 crore shares in ₹400 per capital share for a total amount not to exceed ₹9.5 billion rupees, according to the provisions contained in the regulations of the Securities and Exchange Board of India. This represents 4.16% of the company’s total paid-up capital stock as of September 30.
Wipro shares today closed 0.5% lower at ₹375. The repurchase price has a premium of 6.6% over today’s closing price.
Wipro had announced last year a share buyback of up to 33.3 million shares to ₹325 per share, adding ₹Rs 10,500 crore, and comprises 3.69% of its total paid-up share capital.
Last week, rival Tata Consultancy Services (TCS) announced a mega- ₹16,000 crore buyback plan to ₹3,000 per share of capital. Also in 2017 and 2018, TCS had made buyback offers of similar sizes. TCS offer price of ₹3,000 per share of capital was 9.6% higher than the close of the previous day of the share.
Wipro also announced that the company signed a definitive agreement to acquire Eximius Design India private Limited, an engineering services company with experience in semiconductor, software and systems design for a total consideration of approximately ₹100 crore. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in the quarter ending December 31, Wipro said.
Wipro’s IT services segment revenue for the September quarter was $ 1,992.4 million, an increase of 3.7% quarter-on-quarter. The IT services operating margin for the quarter was 19.2%, an expansion of 0.2% QoQ and 1.1% YoY.
Wipro expects revenue from its IT services business to be in the range of $ 2,022 million to $ 2,062 million for the December quarter, a sequential growth of 1.5% to 3.5%.
Thierry Delaporte, CEO and Managing Director said: “We had an excellent quarter with revenue growth, margin expansion and strong cash generation. I am very excited about the opportunities ahead and encouraged by the acceleration in business momentum that we have seen this quarter. Our strategy is to focus on growth in prioritized sectors and markets led by vertical solution offerings. “
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