Wipro Ltd. will go ex-dividend for its bonus issue on Tuesday, with shares being distributed in a 1:1 ratio
Wipro Bonus Shares: Wipro Ltd. will go ex-dividend for its bonus issue on Tuesday, with shares being distributed in a 1:1 ratio. Notably, this is Wipro’s first bonus issue since 2019. Over the past 15 years, the IT giant has declared at least three bonus issues, bringing the total to nine, according to data from corporate database AceEquity.
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Wipro’s previous bonus issue, in 2019, was declared in a 1:3 ratio, with the stock going ex-bonus on March 6, 2019. Before that, it issued bonus shares in the ratio of 1:1 in 2017, 2:3 in 2010, and 1:1 in both 2005 and 2004. In 1997, Wipro announced a 2:1 bonus issue and issued 1:1 bonus shares in 1995 and 1992. Additionally, last year, the company launched a share buyback plan.
While Wipro is facing some client-specific challenges and a tough demand environment, there are signs of improvement in its BFSI (banking, financial services, and insurance) vertical. Analysts believe that the combination of a favorable portfolio, new CEO Srini Pallia, and attractive valuations offer a compelling risk-reward profile for the company.
Wipro has guided for Q3FY25 revenue growth in constant currency terms of -2% to 1%, which remains relatively muted. However, analysts anticipate a gradual recovery in the second half of FY25, driven by the ramp-up of recently signed deals.
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In a note last week, Nuvama Institutional Equities maintained its earnings projections for Wipro but increased its target valuation to 25 times estimated FY27 EPS, up from 20 times, citing stronger growth recovery. The brokerage upgraded its rating on Wipro to “Buy” from “Hold,” raising the target price to Rs 700 from Rs 520.
Nuvama noted that Wipro stands at a pivotal point, with a new CEO, fresh expectations, and renewed hopes. This time, however, there are two key differences: i) Wipro’s portfolio is now better positioned with higher exposure to discretionary spending, which is expected to benefit from macroeconomic recovery, and ii) the new CEO is an internal leader, aiming to drive growth alongside the existing leadership team, with the goal of achieving growth on par with its peers.
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How IT Stocks Moved During Past Bonus Issues
For the 2010 bonus issue, Wipro’s stock went ex-dividend on June 15, 2010, with the record date set for June 16, 2010. On the ex-date, the stock traded at Rs 136.5, and it saw a slight increase to Rs 139.95 on the record date. However, a day after the record date, Wipro shares declined to Rs 138.35.
In the 2017 bonus issue, the stock went ex-dividend on June 13, 2017, with the record date on June 14, 2017. On the ex-date, Wipro shares were priced at Rs 194.51, and they saw a small uptick to Rs 192.04 on the record date. A day after the record date, the stock slipped to Rs 195.6.
For the 2019 bonus issue, Wipro’s stock traded ex-dividend on March 6, 2019, with the record date on June 7, 2017. On the ex-date, the stock stood at Rs 277.4, and it saw a modest increase to Rs 268.8 on the record date. The stock later dropped to Rs 256.5 a day after the record date.
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