Wipro’s board last week approved the plan to buy back up to 60 crore shares, representing 5.7% of the total paid-up share capital, for an aggregate amount not exceeding Rs 15,000 crore. The buyback price of Rs 250 implies a 22% premium over the stock’s April 22 closing price of Rs 204 per share on NSE.
The buyback will be done via the tender route, and all shareholders on the record date, including those who received the equity shares after cancelling their American Depository Receipts (ADR), will be eligible to take part in the corporate action. Notably, Wipro announced that its promoters and promoter groups have indicated their intention to participate in the buyback, which will be the first one in nearly three years.
Here’s how retail investors can benefit from Wipro’s buyback
Market regulator SEBI has mandated that 15% of a buyback’s total offer size must be reserved for small shareholders. From Wipro’s context, this means that around 9 crore shares worth Rs 2,250 crore at the buyback price will be reserved for small shareholders holding shares worth up to Rs 2 lakh on the record date.
Wipro is yet to announce the acceptance or entitlement ratio for the share buyback. The minimum acceptance ratio, often termed as the entitlement ratio, for retail investors is expected to be around 30.8% while the same for the general category is expected to be 5%, according to Motilal Oswal Wealth Management’s calculations based on the company’s shareholding pattern as on March 31, 2025.
Based on Wipro’s FY25 shareholding pattern, Motilal said that the entitlement ratio for retail investors might get lower as retail participation can increase closer to the record date, which is yet to be announced. However, given that the eligibility for the retail portion of Wipro’s buyback is just 800 shares, which is only about 16% of the 5,000 shares (lowest data point of shareholding as per last annual report), the firm expects the actual acceptance ratio to be high.“Retail investors looking for short-term opportunities can buy the shares of Wipro. Based on the last two buybacks of Wipro and very low retail shareholding, we expect the acceptance ratio to remain high in the range of 50-60% which could give a potential return of 11-13% (pre-tax) with a time frame of 2-3 months,” the wealth management company added.
How much profit can you make?
Let’s break down how much return investors can generate. At an acceptance ratio of 30-40%, an investor who invested Rs 1.63 lakh, can generate 6.8-9% returns, based on the assumption that he is able to exit the untendered shares at the market price, according to the wealth management company.
However, the overall acceptance ratio is expected to be in the range of 50-60%. At these levels, the investor can make a profit of Rs 18,400-22,080 (11.3-13.5%), based on Motilal’s calculations. A higher acceptance ratio in the range of 70-100% will generate 15.8-22.5% returns for the investor, the wealth management company added.
SAMCO Securities meanwhile calculated the returns to remain modest at 5-7% at 30-40% acceptance ratio, and 9-10% at the acceptance ratio of 50-60%. A higher acceptance ratio of 70-100% can generate about 12-16% returns, it further said, adding that the payoff structure is linear, with incremental gains directly linked to acceptance levels.
“Overall, we view Wipro’s buyback as a tactical opportunity rather than a guaranteed arbitrage. The risk-reward appears balanced, with limited downside and attractive upside in favourable participation scenarios. We recommend selective participation, as outcomes remain contingent on acceptance dynamics,” the brokerage said.
In Wipro’s 2023 buyback, the retail entitlement ratio was set at 23.4%, compared with 4.3% for other shareholders. Promoters had indicated their intention to participate then as well.
Wipro shareholding pattern
Promoters and the promoter group held a 73% stake in the company, while the remaining 27% was with the public and others, according to Wipro’s shareholding pattern as of December 31, 2025.
Billionaire Azim Premji was the largest individual promoter with over a 4% stake, while Executive Chairman Rishad Premji held 0.13%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)