Bonus Issue Bonanza: Wipro is among the top bonus-issuing large-cap stock, and on Tuesday, December 3, the stock turned ex-bonus for its 14th reward in the ratio of 1:1. Long-term investors in Wipro are the biggest gainers, while the latest bonus issue makes Wipro shares cheaper for both new and existing investors for a new entry. From trading above Rs 580 yesterday, Wipro stock is now below Rs 300. But did you know if an investor bought 100 shares of Wipro in 1996, their portfolio would have witnessed multi-fold returns? Let's check out with an example!
Wipro Share Price:
After market hours on December 3, its ex-bonus date, Wipro's stock price ended at Rs 291.80 apiece, broadly flat on NSE with a market cap of Rs 3,05,335.11 crore. Adjusted to the bonus ratio, Wipro's new 52-week high and low are at Rs 298 apiece and Rs 201.05 apiece respectively. Adjusted price-to-equity ratio is at 51.63x.
Before ex-bonus date, Wipro shares stood at Rs 585 apiece on NSE.
Wipro Bonus Issue Bonanza:
Example: Let's suppose you bought 100 shares of Wipro in late 1996. As per data on NSE, the lowest price level of Wipro in 1996 was Rs 295 apiece on December 31 of that year. 100 shares will cost around Rs 29,500 in Wipro that time. And if the shares continued to stay in Wipro till December 3, 2024, then these investors record skyrocketing gains. It needs to be noted that in 1996, Wipro did not deliver any bonus.
2:1 Bonus Issue: In 1997, Wipro turned ex-date for the 2:1 bonus issue on October 20th of that year. That being said, 100 shares will receive 200 bonus shares, taking total to 300 equity shares in Wipro.
2:1 Bonus Issue: Wipro delivered another 2:1 bonus shares in 2004 and the ex-date was on June 28. 300 shares of Wipro would have received 600 bonus shares, taking total number of shares to 900 in Wipro.
The ratio of 2:1 bonus issue means that Wipro rewarded 2 free shares on existing 1 equity share.
1:1 Bonus Issue: The next bonus was 1:1 and the ex-date was on August 22, 2005. 900 shares will get another 900 bonus shares, taking the total to 1800 shares in Wipro.
2:3 Bonus Issue: Here, a 2:3 bonus ratio would mean 2 free shares on existing 3 equity shares, which will take the quantum of free shares to 0.67 shares (2 divided by 3). Then, 1800 shares will get 1,206 bonus shares (1800 X 0.67), taking the total number of shares to 3,006 shares in Wipro.
1:1 Bonus Issue: Wipro delivered another 1:1 bonus share in 2017 and the ex-date was on June 14. That time, 3,006 shares would have received another 3,006 shares as a bonus, increasing the number of portfolios to 6,012 shares.
1:3 Bonus Issue: This bonus ratio was carried out on March 7, 2019. The 1:3 means that 1 free share on the existing 3 shares, which results in 0.33 bonus shares (1 divided by 3). Then, 6,012 shares would have received 1,983.96 equity shares (6,012 x 0.33). This will take the total number of shares to 7995.96 equities in Wipro.
1:1 Bonus Issue: If you are still holding the same shares till the ex-date of December 3, 2024, then your 7995.96 equity shares would receive another 7995.96 bonus shares, taking the total number of shares to 15,991.92.
Let's suppose, 15,992 shares. At the closing price of NSE, on December 3, 2024, Wipro shares were at Rs 291.80 apiece. On this closing price, 15,992 shares would be Rs 46,66,465.6.
This is just an example and not the actual gains of a portfolio. Gains in the portfolio varies from investor to investor.
Before 1997, Wipro has been rewarding investors with bonus issues since 1971. The first bonus issue was in 1971, followed by 1:1 bonus shares rewarded six times in 1981, 1985, 1987, 1989,1992, and 1994.
In total, Wipro has delivered 13 bonus shares before 2024, and the latest 1:1 bonus share is the company's 14th reward. The allotment of bonus shares is likely to be done before December 15, 2024.
Earlier, as per the filing, Wipro stated that it aimed to complete the bonus issue within 2 months from the date of Board approval which is December 15, 2024.
BUY/SELL Wipro?
As per the latest update on Trendlyne data, the consensus recommendation from 41 analysts for Wipro Ltd. is HOLD. EPS is expected to grow by 12.3% in FY25. The target price for the post-bonus issue on Wipro is yet to be adjusted.
In Q2FY25, Wipro beats estimates by earning a consolidated net profit of Rs 3,209 crore (attributable to owners), registering a growth of a whopping 21.25% year-on-year and 6.85% quarter-on-quarter.
In dollar terms, the company's IT services segment revenue was at $2,660.1 million, an increase of 1.3% QoQ and a decrease of 2.0% YoY. While non-GAAP constant currency IT Services segment revenue increased 0.6% QoQ and decreased 2.3% YoY.
Wipro is a leading technology services and consulting company focused on building innovative solutions that address clients' most complex digital transformation needs.
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