By Anurag Tiwari
Wipro Shares See Significant Volatility Amid Bonus Issue and Challenging Demand Environment
The success of the IT company Wipro Ltd. has been impacted by client-specific problems in the recent demanding demand environment. But there are some early indications that the BFSI (Banking, Financial Services, and Insurance) industry is expanding. wipro shares news The company’s risk-reward profile is enticing, according to analysts, because of its positive portfolio, new CEO Srini Pallia, and attractive prices.
Wipro’s stock went ex-bonus today at a 1:1 ratio. After correcting for the bonus issue, the stock was trading 1.09% higher on the BSE at Rs 295.50 at the start of trading. But as of yesterday’s closing, the unadjusted share price was Rs 584.55, indicating a substantial 49.45% decline. The 50% drop that is displayed on some platforms may have resulted from some trading apps displaying the unadjusted price.
The record date for the bonus issue is December 2, 2024, and Wipro will use this date to determine eligible shareholders. These shareholders will soon receive the bonus shares, which are issued from the company’s free reserves and surplus to increase liquidity.
In a 1:1 ratio, Wipro shareholders will receive one more fully paid-up share for each share they now own as part of the bonus issue. This action lowers the stock price proportionately while increasing the number of outstanding shares. As of September 30, Wipro had reserves of Rs 56,808 crore. After the bonus, its paid-up equity share capital will be around Rs 20,925 crore, with approximately 10.46 billion equity shares.
This bonus issue is Wipro’s first since 2019, when it issued bonus shares in a 1:3 ratio. The company had previously issued 1:1 bonus shares in 2017 and 2005, and 2:1 bonus shares in 1997. Last year, Wipro also announced a share buyback plan.
Despite the challenges, analysts remain optimistic, citing the potential for growth under the leadership of CEO Srini Pallia, and the company’s ability to capitalize on its strong portfolio and improved market position.
FAQ
1. Why is Wipro’s share price showing a 50% drop on some mobile apps?
Wipro’s share price is showing a 50% drop on certain mobile trading apps because these apps are displaying the unadjusted share price.
The company recently went ex-bonus at a 1:1 ratio, meaning shareholders will receive one additional share for every share they already own. Some platforms are showing the share price before accounting for the bonus issue, which creates the appearance of a significant drop.
2. What does “ex-bonus” mean, and how does it impact Wipro’s share price?
An “ex-bonus” date refers to the day when a company’s stock starts trading without the right to receive the bonus shares. In Wipro’s case, the company’s shares are trading at a 1:1 ratio, meaning one additional share will be issued for every existing share.
This causes the share price to be adjusted downward in proportion to the new shares being issued, but the total value remains consistent, as more shares are added to circulation.
3. What is the current status of Wipro’s stock price?
After adjusting for the bonus issue, Wipro’s stock opened 1.09% higher at Rs 295.50 on the Bombay Stock Exchange (BSE).
However, the unadjusted closing price from the previous day was Rs 584.55, showing a sharp 49.45% decline. This drop can be misleading if the bonus issue is not factored into the share price.
4. How is Wipro’s bonus issue structured?
Wipro’s bonus issue is set at a 1:1 ratio, meaning shareholders will receive one additional fully paid-up share for every share they own. This move aims to enhance market liquidity and provide shareholders with more shares at no additional cost.
5. When was the record date for Wipro’s bonus issue?
The record date for Wipro’s bonus issue was December 2, 2024. This date determines which shareholders are eligible to receive the bonus shares.
6. How will Wipro’s bonus issue affect its paid-up capital?
Post-bonus issue, Wipro’s paid-up equity share capital is expected to increase to around Rs 20,925 crore, with approximately 10.46 billion equity shares in circulation.
The company had reserves of Rs 56,808 crore as of September 30, 2024. The bonus issue will proportionally dilute the stock price but will increase the number of shares available for trading.
7. When was Wipro’s last bonus issue?
Wipro’s most recent bonus issue took place in 2019 when the company issued bonus shares in a 1:3 ratio. Earlier, Wipro had issued bonus shares in 1:1 ratios in 2017 and 2005, and in a 2:1 ratio in 1997.
8. Why are analysts optimistic about Wipro despite challenges?
Despite facing client-specific challenges, analysts remain positive about Wipro’s future growth potential. They cite the company’s strong portfolio, the leadership of new CEO Srini Pallia, and early signs of growth in the BFSI sector as factors that contribute to its promising risk-reward profile.
The company’s attractive valuations also make it an appealing option for investors.
9. What other corporate actions has Wipro undertaken recently?
In addition to the bonus issue, Wipro also announced a share buyback plan last year, aimed at returning value to its shareholders. This is part of the company’s ongoing strategy to enhance shareholder returns and boost market confidence.
