Wipro, India’s fourth-largest IT services company, recently made an exciting announcement that has grabbed the attention of investors—a 1:1 bonus issue of free shares. This means shareholders will receive one additional share for every fully paid-up equity share they own. The board approved the bonus issue as part of its strategy to reward long-term investors.
While the record date for eligibility is yet to be announced, the company confirmed that bonus shares would be credited within two months from board approval, expected by December 15, 2024.
Financial Performance and Q2 Results
Alongside the bonus issue, Wipro shared its financial results for the July-September quarter (Q2 FY25). The company reported a 21.2% year-on-year rise in consolidated net profit, reaching ₹3,208.8 crore.
However, despite this solid growth, Wipro provided a softer revenue forecast for the next quarter due to expected seasonal factors like fewer working days and holiday furloughs. The revenue for Q2 FY25 was ₹22,301.6 crore, slightly down from ₹22,515.9 crore in the previous quarter.
Wipro’s CEO and MD, Srini Pallia, expressed optimism despite the weaker guidance for the October-December quarter, citing strong deal bookings and the company’s ability to maintain margins.
Wipro has recorded $1.5 billion in large deal bookings, the highest in 10 quarters, and maintained a robust operating cash flow of ₹42.7 billion, which is 132.3% of its net income.
Bonus Share Distribution and Shareholder Impact
The bonus equity shares will be issued from the company’s free reserves, and the proportion for American Depositary Share (ADS) holders will also follow a 1:1 ratio.
The move is seen as a way to boost liquidity in the stock market and create more shareholder value. For investors, this translates to an increased number of shares, though the overall value of their investment remains unchanged, as the stock price adjusts accordingly.
Wipro has also made significant strides in the realm of artificial intelligence, with over 44,000 employees trained in advanced AI technologies. These developments position Wipro strongly for future growth, even amid some short-term challenges.
Disclaimer
This article provides market analysis for informational purposes. Consult a financial expert before making investment decisions.
