Wipro turns ex-date for share buyback; stock down 5% intra-day

Wipro dipped 5% to Rs 282 on BSE in intra-day trade after the stock turned ex-date for the proposed buyback.

Wipro on September 1, 2017 informed the stock exchanges that the Company has fixed September 15, 2017 as the record date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback.

On July 20, 2017, the board of directors of information technology (IT) Company had approved a buyback proposal, for purchase by the company of up to 343.75 million equity shares of Rs 2 each at price of Rs 320 per share from the shareholders of the company on a proportionate basis by way of a tender offer.

Since then, Wipro had outperformed the market by surging 10% as compared to 1% rise in S&P BSE Sensex and 2% decline in the S&P BSE IT index till Wednesday.

At 10:20 AM; the stock was trading 4% lower at Rs 284, against 0.29% rise in Sensex and 0.19% gain in IT index.

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Wipro gains after shareholders approve Rs 11,000 cr buyback proposal

STOCK MARKET - Shares of Wipro gained nearly 2% on Thursday in an otherwise weak market after country’s third-largest software services firm said its shareholders have approved the company’s Rs 11,000 crore buyback proposal.

The stock added as much as 1.8% to Rs 297 on the BSE against 0.2% fall in the Nifty IT index.

Last month, the Bengaluru-based firm had said it will purchase up to 34.37 crore shares at Rs 320 ($4.95) per scrip. The total size of the offer will be up to Rs 11,000 crore ($1.7 billion).

“The aforesaid special resolution has been passed through postal ballot and e-voting by members by requisite majority,” Wipro said in a filing to the BSE.

The voting, which ended on 28 August, saw 99.68% of the votes being cast in favour of the buyback offer. Wipro was trading marginally higher at Rs291.40 on the BSE.

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

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TCS to shut Lucknow centre, says no job losses, staff to be relocated

India's largest IT services firm Tata Consultancy Services is shutting its Lucknow centre as part of the consolidation of its UP operations and has asked its over 1,000-odd employees to either shift to its centre in Noida, Indore or any other facility in the country

"We are consolidating our UP operations. There have neither been any job losses nor have we asked anyone to quit," said a TCS spokesperson.

TCS is also setting up a large BPO operation in Varanasi, Prime Minister Narendra Modi's constituency next year and some of these staff could  be absorbed in the centre.

The 10-year old facility in Gomti Nagar, does  internal process for TCS and has a small team that works on projects for  global clients.

TCS employees in Lucknow were briefed about the development  on Wednesday, following which they have petitioned UP chief minister Yogi Adityanath and Prime Minister Modi  for their intervention.

A  group calling themselves SaveTCSPlease has drafted a letter to these leaders claiming that around 2,000 employees, half of them women, would be affected by this shift by TCS.

The letter signed by "TCS Lucknow employees and their dependents" said that around 300-400 employees will be retained in the Lucknow premises and that most of the existing projects will be transferred to the upcoming premises in Indore. They have alleged that employees are being forced to transfer to other cities now.

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Tech Mahindra gets HC notice for illegal layoffs amid HR audio clip fiasco

Tech Mahindra is in the news again, this time over notices issued by the Hyderabad High Court to the state of Telangana, the state's labour department, and the information technology (IT) major directing them to respond to the alleged unlawful retrenchments of software engineers employed by the firm. The development was reported by the Times of India on Tuesday.

The legal notice comes in the back drop of the recent controversy at the IT major over a taped conversation between its human resource  (HR) management staff and an employee who was handed the pink slip.

According to the national daily, Justice M S Ramachandra Rao gave the parties three weeks to file their replies to the allegations raised in a writ petition filed by four retrenched Tech Mahindra employees.

Tech Mahindra's management faces allegations of large-scale and illegal retrenchment of its employees in Hyderabad, the report said, citing the submission made by the counsel for the retrenched employees before the court.

The petitioners, the report added, had approached the labour commissioner under whose jurisdiction Tech Mahindra falls. Subsequently, the department set in motion a conciliation process. However, the company went ahead and terminated the petitioners' employment even as the process was underway.

While Tech Mahindra is not the only IT major handing out pink slips in large numbers, a recently leaked audio clip has left it with a weak hand. 

5 Nifty companies announce bonus shares in 2017; highest in 11 years

MARKET NEWS - Engineering & construction giant Larsen & Toubro (L&T) and state-owned oil marketing company, Bharat Petroleum Corporation (BPCL) from the Nifty50 index in last week declared bonus shares in the ratio of 1:2 i.e. 1 new bonus equity share for every existing 2 equity shares.

Besides these two, total five companies including ICICI Bank, Wipro and Gail (India) from the index announced bonus shares thus far in the current calendar year 2017 (CY17). The number of companies from the Nifty50 index rewarding bonus shares to their shareholders is the highest in past 11 years.

Earlier, during the entire calendar year 2006, total seven companies – Cipla, Tata Consultancy Services (TCS), Infosys, Dr Reddy’s Laboratories, L&T, Oil and Natural Gas Corporation (ONGC) and HCL Technologies – from the benchmark index had issued bonus shares.

In 2015 and 2010, five companies from the Nifty 50 issued bonus shares, but Aurobindo Pharma in 2015 and Bajaj Auto and Zee Entertainment in 2010, were not part of the index in that particular year.

In last calendar year 2016, three companies – ONGC, BPCL and ITC – issued bonus shares, while in CY2015, Tech Mahindra, HCL Technologies, Infosys and Kotak Mahindra Bank had declared bonus shares, according to data compiled from CapitalinePlus.

Thus far in 2017, the equity markets have recorded its best ever start during past eight years, with the Nifty 50 index gaining 17.5% between January and May, 2017. In 2009, the benchmark index had rallied 50% during the same period.

Meanwhile, in first five months of CY17, as many as 36 companies announced bonus to their equity shareholders, against 25 firms declared bonus shares in the same period of CY16. In CY13, total 114 companies announced bonus shares, followed by 49 in CY14, 59 in CY15 and 69 in CY16.

BPCL had issued bonus shares for the past two consecutive years and third time in five years. In May 2016 and in May 2014, the state-owned oil marketing companies declared bonus shares in the ratio of 1:1 i.e. one bonus shares for every one share held.

Market observers say bonus shares are being given to improve liquidity, besides rewarding the shareholders. After the issue, the stock price gets adjusted according to the bonus ratio. The total market value of the company, however, remains the same.

A bonus share issue also indicates that the company is confident about the business’s capacity to generate value for a larger number of investors. That apart, it also helps in boosting the trading volume at the bourses, as more number of shares are traded.