India’s third largest IT firm Wipro on Thursday announced a mega buyback offer of Rs 11,000 crore, joining the growing roster of IT firms returning surplus cash to their shareholders.

"The board of directors approved a buyback proposal, subject to the approval of shareholders through postal ballot, for purchase by the company of up to 343.75 million equity shares of Rs 2 each (representing 7.06 per cent of total equity capital),” Wipro said in a statement.

The buyback price will be Rs 320 ($4.95) per equity share for up to Rs 11,000 crore ($1.7 billion), it added. The company said it will disclose additional information on the terms and conditions of the buyback in due course in accordance with Buyback Regulations.

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

As on June 30, 2017, Wipro had ‘cash and cash equivalents’ of Rs 5,432 crore on its books and ‘investments’ of Rs 31,772 crore totalling Rs 37,204.

Among Indian IT companies, TCS, which had a cash pile of over Rs  43,000 crore, has already completed a Rs 16,000 crore buyback programme  earlier this year.

The Infosys board has already identified an amount of up to Rs 13,000 crore ($2 billion) to be paid out to shareholders during financial year 2018, through dividend and share buyback.

For the April-June quarter.Wipro posted a 1.2 per cent rise in its consolidated net profit at Rs 2,076.7 crore.

The Bengaluru-based firm had registered a net profit of Rs 2,052 crore in the year-ago period. Its total income grew marginally to Rs 14,281.4 crore during the first quarter.

Wipro, which gets bulk of its topline from IT services, said it expects revenues from that business to be in the range of $1,962-2,001 million in the September quarter.

For the June quarter, IT services revenue was at $1,971.7 million, up 2.1 per cent from the year-ago period. “We delivered revenues above the upper-end of the guidance range. Our focus on digital, combined with our investments in client mining, has resulted in strong growth in top accounts,” Wipro CEO Abidali Z Neemuchwala said.

Wipro CFO Jatin Dalal said the impact on operating margins on account of rupee appreciation and salary increases was partially offset by strong business efficiencies. “We continue to sustain robust cash generation,” he added.

During the June quarter, Wipro added 1,309 (gross) employees, taking  its total headcount to 1,66,790 people.

On the buyback offer, Dalal said the announcement to buyback equity shares is part of Wipro's philosophy to “deliver efficient returns to shareholders”.

Wipro, during the quarter ended June 30, 2017, allotted bonus equity shares -- one bonus share for every one share held -- to its shareholders.

The company's revenue from IT products during the quarter was Rs 630 crore ($98 million), an increase of 7 per cent year-on-year.

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