Abidali Neemuchwala, chief executive officer of Wipro Ltd., speaks in Las Vegas, Nevada, U.S. (Photographer: Jacob Kepler/Bloomberg)

Wipro Announces Bonus Share Issue And Interim Dividend

Wipro Ltd. will reward shareholders with one free share for every three they hold in the software services provider.

The board approved the payout worth Rs 301 crore at its meeting to review the third quarter financial results, according to its stock exchange filing. The actual amount will be determined based on the paid-up share capital as on the record date.

Wipro also announced a bonus issue of the same ratio for its American Depository Receipt holders too. The bonus shares are expected to be issued by March 17.

The company also announced an interim dividend of Re 1 per share, which will be paid before Feb. 6.

Over the past two years, Indian software companies have been returning excess cash to shareholders by offering buybacks, dividend and bonus shares. Wipro last repurchased shares worth Rs 11,000 crore in November 2017.

Share buybacks improve earnings per share and return surplus cash to shareholders, while also supporting share price during periods of sluggish market conditions.

Wipro’s crosstown peer Infosys Ltd. announced a buyback of 10.3 crore shares and a special dividend for shareholders worth over Rs 10,000 crore last week. It had issued bonus shares in the ratio of 1:1 last year. Tata Consultancy Services Ltd. completed a buyback worth Rs 16,000 crore in 2018, its second in the last three years.