IT services giant Wipro on Tuesday said its net profit increased by 38.4 per cent to Rs 2,493.9 crore in the March 2019 quarter, and announced a Rs 10,500 crore buyback programme.
The Bengaluru-based company had posted a net profit of Rs 1,800.8 crore in the January-March 2018 period, Wipro said in a BSE filing.
Its revenue from operations—under IND AS accounting norms—grew 8.9 per cent to Rs 15,006.3 crore in the period under review from Rs 13,768.6 crore in the year-ago period.
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For the full fiscal (2018-19), Wipro saw its net profit increasing by 12.6 per cent to Rs 9,017.9 crore, while revenue from operations was up 7.5 per cent to Rs 58,584.5 crore.
Buyback plan
IT services giant also announced an up to Rs 10,500 crore buyback offer, its second in about 15 months, under which 32.3 crore shares will be bought back from shareholders at Rs 325 per share.
This is Wipro's third buyback programme. It had undertaken a Rs 2,500 crore programme in 2016, and another Rs 11,000 crore buyback offer in November-December 2017.
"...the Board of Directors of Wipro Ltd at its meeting held on April 16, 2019 has approved a proposal to buyback up to 32,30,76,923 equity shares of the company for an aggregate amount not exceeding Rs 10,500 crore, being 5.35 per cent of the total paid-up equity share capital at a price of Rs 325 per equity share," Wipro said in a regulatory filing.
The buyback, it added, is proposed to be made from the existing shareholders of the company through a tender offer route in accordance with the provisions.
"Members of the promoter and promoter group of the company have indicated their intention to participate in the proposed buyback," it said.
As on March 31, 2019, promoters held 73.85 per cent shares, while 6.49 per cent was held by Indian financial institutions, banks and mutual funds. Foreign holding was at 11.74 per cent, and that of Indian public, corporates and others was at 7.92 per cent.
The proposal is subject to approval of shareholders by way of a special resolution through a postal ballot. The process, timelines and other requisite details with regard to the postal ballot will be communicated in due course, Wipro said.
Wipro shares closed at Rs 281.10 apiece, down 2.45 per cent from its previous close on the BSE. The company's results for the fourth quarter and FY19, along with the buyback plan announcement was made after market hours.
Wipro's larger rival Tata Consultancy Services (TCS) has undertaken two buyback programme—of Rs 16,000 crore—in recent years. Infosys, too, had announced an up to Rs 13,000 crore buyback in December 2017, followed by another buyback of Rs 8,260 crore in January this year.
Apart from the big players, other Indian IT firms like HCL Technologies and Mphasis have also returned surplus cash from its books to shareholders in the form of buyback and special dividends. Mindtree, which is facing a hostile takeover by L&T, is also scheduled to take a decision on offering special dividend to shareholders.
