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Explainer: Why Premji’s stake in Wipro rose even after share sale

Wipro Buyback
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Wipro Buyback

Azim Premji and the promoter group of Wipro Ltd have sold stock worth over a billion dollars (Rs 7,300 crore) in the buyback programme announced by India’s fourth-largest IT services company. It amounted to 224.6 million shares, amounting to about 3.96% of the total equity stake held by them.

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Premji and the promoter group holding in Wipro before the buyback
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Premji and the promoter group holding in Wipro before the buyback

They hold 73.83% of the shares.

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What will be their holding post the buyback
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What will be their holding post the buyback

They will have 74.05% stake in the company

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How will their holding increase if they have sold shares to the company in the buyback
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How will their holding increase if they have sold shares to the company in the buyback

Wipro will extinguish or cancel 323.3 million shares that it got from shareholders in the buyback, for which it spent around Rs 10,500 crore. This will reduce the total volume of shares of the company and this would increase Premji and promoter holding their holding in proportional to the reduced shares.

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