InvestorQ : What is the ratio of buyback that Wipro is planning?
Mary Joseph made post

What is the ratio of buyback that Wipro is planning?

Answer
user profile image
Arusha Ray answered.
3 weeks ago


Wipro has only announced the buyback intent, which will be discussed at its board meeting on 13 October wherein the ratio, if any, would be finalized. With TCS announcing the buyback plan, Wipro could not afford to be really too far behind.

Wipro has done buybacks earlier but had put on hold after the decision of the previous budget to tax buybacks. The intent to consider buyback of shares was made by Wipro in a filing to the stock exchanges. The board of Wipro meets on October 13

On the 13 October, Wipro is expected to announce a buyback along with its results for the September quarter. Like in the case of TCS, the buyback is expected to be meaningfully higher than the current market price so as to make it more attractive to shareholders.

For IT companies with oodles of cash, buybacks are an efficient way of rewarding as dividends for higher income groups are taxed at the peak rate of 42.74% making it extremely ineffective. Despite the tax on buybacks, they are more tax-efficient.