NEW DELHI: Shares of Wipro today surged over 8 per cent to touch its one-year high level after the company announced a mega buyback offer of Rs 11,000 crore and posted a 1.2 per cent rise in consolidated net profit for the April- June quarter.
The scrip of India's third largest IT firm opened the day on a bullish note and further soared 8.17 per cent to Rs 291 its 52-week high level on BSE. On NSE, it zoomed 8 per cent to touch its one-year high of Rs 290.90. The stock was the biggest gainer on both the key benchmark indices during the morning trade.
"Wipro announced a good set of numbers. On the positive side, the board of directors approved a buyback proposal," said Sarabjit Kour Nangra, VP Research - IT, Angel Broking. Wipro yesterday announced a mega buyback offer of Rs 11,000 crore, joining the growing roaster of IT firms returning surplus cash to their shareholders. "The Board of Directors approved a buyback proposal, subject to the approval of shareholders through postal ballot, for purchase by the company of up to 343.75 million equity shares of Rs 2 each (representing 7.06 per cent of total equity capital)," Wipro said in a statement.
The buyback price will be Rs 320 (USD 4.95) per equity share for up to Rs 11,000 crore (USD 1.7 billion), it added. Share buybacks improve earnings per share and return surplus cash to shareholders while also supporting share price during periods of sluggish market conditions. Besides, Wipro has posted a 1.2 per cent rise in its consolidated net profit at Rs 2,076.7 crore for the April-June quarter. The Bengaluru-based firm had registered a net profit of Rs 2,052 crore in the year-ago period. Its total income grew marginally to Rs 14,281.4 crore during the first quarter.