Leading IT company, Wipro Limited has announced a big bonus reward for its investors, for the first time since 2019. The company announced a bonus issue of a 1:1 ratio, and the record date will be declared in due course. Wipro has a strong track record of paying bonus issues in over two decades.
Wipro Bonus Issue:
In a board meeting on October 17, the board of directors of Wipro approved the issuance of bonus equity shares in the proportion of 1:1.
The bonus issue ratio means that 1 (One) bonus equity share of Rs 2/- each for every 1 (One) fully paid-up equity share held and a bonus issue.
Wipro said, "The record date for reckoning eligible shareholders entitled to receive bonus shares will be communicated later."
Notably, the bonus equity shares will be issued out of free reserves and/or the securities premium account and/or the capital redemption reserve account of the Company available as of September 30, 2024.
Further, Wipro emphasized that the actual number of bonus equity shares to be issued will be determined based on the fully paid-up equity share capital as of the record date.
Wipro has free reserves or share premium of Rs 10,462,971,564. And the actual paid-up share capital will be determined based on the paid-up share capital as of the record date. The aggregate amount of free reserves, securities premium account and capital redemption reserve account, is up to Rs 568,080 million as of September 30, 2024.
According to the filing, the company plans to complete the bonus issue within 2 months from the date of Board approval which is December 15, 2024.
Wipro Results:
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 Share Price:
Wipro share price ended at Rs 528.80 apiece, down by 0.65% on BSE, with a market cap of Rs 2,76,639.31 crore on Thursday.
Wipro is a leading technology services and consulting company focused on building innovative solutions that address clients' most complex digital transformation needs.
What Are The Advantages Of Bonus Issues?
As per the SBI Securities website, the following are the advantages of bonus issues in general terms. They are:
Increased Holdings: The bonus issue of shares increases the number of shares you own without any additional investment, potentially boosting your wealth in the long term when stock prices and earnings of the company increase.
Enhanced Liquidity: Increased trading activity can lead to better liquidity in the market for the company's stock thus making it easier for you to buy or sell shares.
Positive Signal: Companies often issue bonus shares when they are confident in their financial health and prospects, which can be seen as a positive signal to investors.
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