The board of Wipro Ltd on Friday approved a 1:3 issue of bonus equity shares. However the company did not specify the record date. The company also declared an interim dividend of Rs 1 per equity share. This is the second bonus issue by the IT major in 2 years. In 2017, Wipro had announced a 1:1 bonus issue and also carried out an Rs 11,000 crore share buyback programme. Wipro also reported a 30% jump in third-quarter profit on Friday at Rs 2,510 crore from Rs 1,931 crore in the year-ago period.
Shares of IT firm Wipro climbed 3% in morning trade on Tuesday after the company said it will consider a bonus issue proposal in its board meeting to be held on January 17-18, 2019. The company is also slated to announce its third-quarter earnings numbers on January 18. In June 2017, the company had announced its fifth bonus issue in ten years at 1:1 ratio.
Economic slowdown in the US might hurt India $167 billion information technology sector outsourcing industry. Experts fear Fortune 1000 companies may cut spending on technology, hurting Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd. Economists at Morgan Stanley expect the US to grow at 2.3% in the current year, down from an estimated 2.9% growth in 2018. US accounts for bulk of business, between 55% and 70% for the five largest Indian IT companies, including TCS, Infosys, HCL Technologies Ltd, Wipro and Tech Mahindra.
Analysts expect Wipro to announce a share buyback worth $1-1.2 billion in the current quarter subject to regulatory approvals and NCLT decision on merger of its four businesses. The NCLT is considering the tech major’s proposal to merge Wipro Technologies Austria, Wipro Information Technology Austria, NewLogic Technologies SARL and Appirio India Cloud Solutions with itself. Analysts expect the buyback to be at a premium of 20-25% to the current market price. Wipro is coming off the one-year moratorium for a share buyback since it last did in November-December 2017. A buyback can be done only once in 12 months.