Wipro shares trade ex-buyback as record date today — what should be your strategy

For Wipro, analysts largely expect an acceptance ratio in the 40-60 percent range. The last buyback by Wipro saw almost 100 percent acceptance. Retail acceptance in fact stood in the range of 50-100 percent in the last four share buybacks.

"We expect the buyback to generate a strong response from all retail and institutional holders as the buyback price is attractive," said Avinash Gorakshakar, Head of Research at Profitmart Securities.

"This is a tender offer, and the buyback price is Rs 445. The share is currently trading at around Rs 389, so as of today, the calculated premium is more than 14 percent, so we will advise you to take part in this buyback. Furthermore, we anticipate an acceptance ratio of around 40 percent, which has the potential to increase to 60 percent. This expectation is supported by the fact that retail investors experienced an almost 100 percent acceptance ratio in the previous buyback offer in 2020," said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

On Friday, the Wipro stock was trading 1.38 percent lower at Rs 383.60 apiece on the NSE. The stock has lost 2.40 percent on a year-to-date basis, while it was down 1 percent in the last one month. According to Trendlyne data, Wipro has an average target of Rs 416.69, which represents an upside of 8.6 percent from the current market levels.

"The stock has witnessed resistance near 410 levels and has slipped with profit booking seen moving below the significant 200 period daily moving average at 392 slightly weakening the bias. Further slide is anticipated with 380 as the near term support zone where it can consolidate. On the upside, once again a decisive move is necessary above 410 levels to improve the trend and expect for further upward journey," said Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher.

Technically, the counter's 14-day relative strength index (RSI) was at 52.9. A level below 30 is defined as oversold while a value above 70 is considered overbought. Wipro traded higher than the 50-day, 100-day and 150-day moving averages but lower than the 5-day, 20-day, 30- and 200-day moving averages.

Wipro's Rs 12,000-crore share buyback is the biggest in terms of buyback size. If an individual includes the previous four share buybacks that the IT major announced since 2016, the total buyback announced by the Azim Premji founded company stands at Rs 45,500 crore in eight years.

Under a share buyback, the company buys back its own shares from shareholders and it is seen as a tax-efficient way to give cash back to investors. Share buybacks reduce the number of shares available in the market and thereby increases the real value of the stock.

The promoters and members of the promoter group also intend to participate in the proposed buyback.