InvestorQ : I am having Wipro Shares. How buyback is going to affect me?
Riya Dwivedi made post

I am having Wipro Shares. How buyback is going to affect me?

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Suhani Mirza answered.
1 year ago

Buyback of shares means that a listed company repurchase its own shares from the secondary market. Through buyback, the company get backs its own shares and thus increasing the promoters’ stake in the company. The buyback generally opts when a company has an excess of profit.

On 10th April, after the market closed, the company announced that it may buy back its Rs 12,000 crore from the market if board meeting on April 16, 2019, decide so. Wipro is an IT Bluechip company and had a financial sound report. This will be the third buyback of Wipro after Rs. 2,500 crore in 2016 and Rs. 11,000 crore in 2017.

As an investor, you will definitely benefit from this buyback, because company generally quote price higher than the market. For example, if the stock is trading at Rs. 282, then the the company will give a price at a premium, let say Rs.300. In this case, you will benefit from the buyback and so can make profit from it. It should be noted that the company gives and offer to repurchase its own share that you hold, but the right to accept the offer or reject the offer lies with you.

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Purvesh answered.
1 year ago

The buyback is always good for the investor point of view. This shows that promoters are buying their shares back.