IT stock Wipro sets record date for share buyback at a premium of 9%, LIC held stake in Q4: Buy sell or hold?

IT giant Wipro closed on Friday at a market cap of Rs 2,22,188.32 Cr. The stock ended at Rs 404.80 apiece with a downside gap of 0.60% after the company fixed record date for Rs 12,000 crore buyback proposal.

"The Company has fixed Friday, June 16, 2023 as the Record Date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback," said Wipro in a stock exchange filing.

The IT giant had set a buyback price of Rs. 445 per equity share and announced a share buyback proposal of Rs. 12,000 crore. Wipro had announced that it had buyback up to 26,96,62,921 fully paid-up equity shares of the company at a face value of Rs. 2. Considering the buyback price of Rs 445 apiece, the stock is trading at a healthy buyback premium of 9.93% at the current market price.

During Q4FY23, Wipro recorded a 0.4% year-on-year (YoY) decline in its consolidated net profit, which came in at Rs 3,075 crore. A profit of Rs 3,053 crore had earlier been reported by the IT services company for Q4FY22. At Rs 23,190 crore, up from Rs 20,860 crore in the same period previous year, its overall revenue from operations climbed by 11.2%.

During Q4FY23, the company reported promoters shareholding of 72.92%, FIIs stake of 6.38%, DIIs stake of 8.01%, public stake of 12.51% and others stake of 0.18%. According to Trendlyne data, promoters reduced their stake in the shares of Wipro from 72.94% in the December 2022 quarter to 72.92% in the March 2023 quarter, while FII/FPI lifted-up their stake from 6.30% in Q3FY23 to 6.38% in Q4FY23, while mutual funds raised their stake from 2.75% to 2.79% and institutional investors increased their stake from 16.51% to 16.78%.
As per the shareholding pattern of Wipro for January to March 2023 quarter, insurance giant LIC held 24,26,77,381 fully paid up equity shares or 4.42% stake in the company whereas under the mutual fund category, SBI Arbitrage Opportunities Fund held 5,74,64,392 equity shares or 1.05% stake.

Commenting on the outlook for the stock, A R Ramachandran, Co-founder & Trainer-Tips2trades said "Short term investors or traders can book profits at current levels in Wipro as a price correction till support of 390 looks overdue. However, long term investors should not tender shares back as long term outlook of Wipro remains positive with target of 485-560 looking possible this year."