Wipro Limited, a leading IT services company in India, has made headlines today, October 17, 2024, by announcing a 1:1 bonus share issue. This significant decision was taken during a board meeting held on October 16-17, 2024. The board recommended to shareholders that they approve the issuance of one bonus equity share for every fully paid-up equity share held. This means that for each share owned, shareholders will receive an additional share at a face value of ₹2.
Main Points
The bonus shares will be issued out of the company’s free reserves and/or the securities premium account. Wipro’s current paid-up equity share capital stands at ₹1,046.3 crore, which will effectively double to approximately ₹2,092.59 crore following the bonus issue. The total number of shares will increase from 523.14 crore to about 1,046.3 crore shares.
The company has not yet specified the record date for determining eligible shareholders who will receive these bonus shares. This date is crucial as it marks when shareholders must own shares to qualify for the bonus. Wipro has stated that this information will be communicated later.
Historical Context of Bonus Issues
This announcement marks Wipro’s first bonus issue since 2019 and its fourth overall since becoming a publicly listed company. The last time Wipro issued bonus shares was on March 6, 2019, in a 1:3 ratio. Historically, Wipro has provided bonus shares multiple times since its inception, with ratios varying from 2:3 in 2010 to 1:1 in previous years.
Financial Performance
In conjunction with the bonus announcement, Wipro also reported its financial results for the quarter ending September 2024. The company experienced a 21% increase in net profit, rising from ₹2,646 crore in the previous year to ₹3,209 crore this year. This growth exceeded market expectations and reflects Wipro’s robust performance amid challenging market conditions.
Revenue for the quarter was reported at ₹22,302 crore, showing a slight increase of 1.5% compared to the previous quarter. Analysts had projected revenues around ₹22,235 crore.
Market Reaction
Following the announcement of the bonus issue and quarterly results, Wipro’s shares closed at ₹528.80 on the Bombay Stock Exchange (BSE), marking a decline of 0.65% on the day. Despite this drop, over the past year, Wipro’s stock has appreciated by approximately 28.58%, indicating strong investor confidence in the company’s long-term prospects.
