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Wipro figured 6% hike as the board to consider share buyback plan

Wipro announced a buyback plan on October 13. This decision raised Wipro shares 6% in early trade on Thursday, October 8.

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The stock market is trading higher for the consecutive sixth day with Sensex jumping 479.35 points or 1.2 per cent at 40358.30, and Nifty gaining 132.20 points or 1.13 per cent at 11871.10.

Shares of Wipro raised by 6 per cent in early trade on Thursday after the company said its board will contemplate a buyback plan on October 13. The stock gain is 52-week high on BSE that is 6.27 per cent to Rs 356.30. 

This announcement came when the largest competitor Tata Consultancy Services Board cleared up a buyback plan up to 16,000 crores.

The final decision will be shared with stock exchanges right after the conclusion of the Board meeting on October 13, 2020.

Why A Company BuyBacks its own shares?

A buyback term in stock denotes repurchasing of stock shares by the share issuer company itself. A buyback happens when the owner company re-absorbs the segment of its ownership by paying the market value of unit shares to the shareholders.

The share buybacks allow the company the direct purchase of shares, either from the market, or from its shareholders. From the last few decades share buybacks have been found to be the more efficient way of returning cash to shareholders than dividends. 

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Points To Remember

  1. There might be different reasons for share buyback like increase in equity value, consolidation of company, or to increase the financial attractiveness.
  2. The only drawback of the buyback is they are generally financed with debt, which can block the cash flow.
  3. The overall impact of buyback on economic growth is positively mild.

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Hindenburg effect: RBI seeks info from banks of exposure to Adani Group

Troubled times continue for the Adani Enterprises in the aftermath of the scathing Hindenburg Research group report as The Reserve Bank of India, Thursday, sought details from local banks about their exposure to the conglomerate’s companies following the group’s $100 billion wipeout in market valuation since last week.

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Adani Group

Troubled times continue for the Adani Enterprises in the aftermath of the scathing Hindenburg Research group report as The Reserve Bank of India, Thursday, sought details from local banks about their exposure to the conglomerate’s companies following the group’s $100 billion wipeout in market valuation since last week.

A report by Reuters quoting government and banking sources confirmed the development however, RBI has yet to issue an official statement on the matter, even as the rout continued for the Adani Group today as their shares continued to plummet.

Regulatory body, Securities and Exchange Board of India (Sebi) has also reportedly started examining the recent crash in Adani Group stocks.

Adani Group Chairman, Gautam Adani, who witnessed an absurd drop of $40 billion in personal fortune since last week, sent out a video statement today to calm the investors after the Adani Board of Directors called off its FPO and returned the investors’ money.

 In an exchange filing, the business group said that the decision was taken at a meeting of its Board of Directors, who, in the interest of its subscribers, decided not to proceed with the FPO of equity shares aggregating up to Rs 20,000 crore of face value Rs 1 each on partly paid-up basis, which was fully subscribed.

Embattled chairman, Gautam Adani, issued a statement, saying the decision was taken amid the fluctuations the company’s stocks witnessed during the day’s trading. Adani said it wouldn’t have been morally correct to go ahead with the FPO due to the unprecedented fluctuations in the group’s stock prices on Wednesday.

Adani pointed out that the group feels that the interest of the investors is paramount and “hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO.”

Adani Enterprises is working with its Book Running Lead Managers (BRLMs) to refund the proceeds received by it in escrow and to also release the amounts blocked into investors’ bank accounts for subscription to this issue.

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Shares in Adani Enterprises, often described as the incubator of Adani businesses, plunged 30 per cent on Wednesday. Adani Power fell 5 per cent, while Adani Total Gas slumped 10 per cent, down by its daily price limit, Reuters reported.

Adani Transmission was down 6 per cent and Adani Ports and Special Economic Zone dropped 20 per cent. Adani Total Gas, a joint venture with France’s Total, has been the biggest casualty of the report, losing about $27 billion.

Underscoring the nervousness in some quarters, Bloomberg reported on Wednesday that Credit Suisse had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.

India’s markets regulator, which has been looking into deals by the conglomerate, has said it will add Hindenburg’s report to its own preliminary investigation.

State-run Life Insurance Corporation (LIC) said on Monday it would seek clarifications from Adani’s management on the short seller report. The insurance giant was, however, a key investor in the Adani Enterprises share sale.

Hindenburg Research published a report last week, accusing the Adani Group of indulging in improper use of offshore tax havens and stock manipulation while also raising concerns about high debt and the valuations of seven listed Adani companies.

The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian law, adding that it has always made the necessary regulatory disclosures.

Hindenburg Research on Monday hit back at the Adani Group, day after the business house dubbed the New York-based firm’s report as “calculated attack on India.”

In a response titled “Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised,” Hindenburg Research accused the Adani Group of holding back India’s progress by draping itself in the Indian flag while systematically looting the nation.

Hindenburg said it believes that India is a vibrant democracy and an emerging superpower with an exciting future. However, the research group alleged that the country’s future was being held back by the Adani Group, “which has draped itself in the Indian flag while systematically looting the nation.”

Hindenburg stressed that it’s a firm believer in the fact that fraud is fraud even when perpetuated by one of the wealthiest individuals globally.

The Group’s chairman, Gautam Adani on Wednesday dropped to 15th on the Forbes rich list with an estimated net worth of $76.8 billion as the shares of his conglomerate plunged once again in the aftermath of the Hindenburg group report.

Before the scathing report by the US short-seller, Adani was ranked third on the list and also ranked Asia’s richest person, a title which he also lost after his personal fortune reportedly fell by over $40 billion.

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We do not want investors to suffer, Gautam Adani’s video message after FPO withdrawal | WATCH

Adani also said that whatever his achievement in life was, was because of the faith and trust of the investors

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Gautam Adani

Adani Group on Wednesday withdrew the Rs 20,000 crore Follow-on Public Offer (FPO) of his flagship company Adani Enterprises. After this, Gautam Adani himself has come forward and explained to the investors and also gave the reason for withdrawing the FPO.

This FPO for Rs 20,000 crore was opened for subscription on January 27 and was closed on January 31 after being fully subscribed.

Watch the video here:

Why was the FPO withdrawn?

In the video Gautam Adani can be heard saying that the decision to withdraw the FPO on Tuesday after a fully subscribed FPO must have surprised many. But considering the volatility of the market yesterday, the board felt that it would not be ethical to go ahead with the FPO.

Adani Group Chairman Gautam Adani has said that the company’s objective is to protect the interests of its investors in view of the ups and downs in the stock market. That’s why we are going to return the amount received from FPO and end the transaction related to it, he said in the video.

He also said that for him the interest of his investors was paramount. Therefore, to protect investors from possible losses, his company has withdrawn the FPO.

This decision will have no impact on the company’s current operations and future plans, said Gautam Adani, adding that in his humble journey of over 4 decades as an entrepreneur, he has received overwhelming support from all stakeholders, especially the investor community. He also said that whatever his achievement in life was, was because of the faith and trust of the investors.

Stocks fell

Shares of Adani Enterprises fell 28.5 per cent to close at Rs 2,128.70 on Wednesday. Adani Enterprises sold shares in the price band of Rs 3,112 to Rs 3,276. Shares of Adani Enterprises are down over 49 per cent from their 52-week high. Its stock is down more than 37 per cent in just one week.

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Hindenburg fallout: Adani Enterprises cancels FPO, returns money to investors

Adani Enterprises continues to sink further in troubled waters due to the fallout of the damning Hindenburg report as the conglomerate cancelled its Follow-On Public Offering (FPO) on Wednesday and will return money to its investors.

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Adani Group

Adani Enterprises continues to sink further in troubled waters due to the fallout of the damning Hindenburg report as the conglomerate cancelled its Follow-On Public Offering (FPO) on Wednesday and will return money to its investors.

In an exchange filing, the business group said that the decision was taken at a meeting of its Board of Directors, who, in the interest of its subscribers, decided not to proceed with the FPO of equity shares aggregating up to Rs 20,000 crore of face value Rs 1 each on partly paid-up basis, which was fully subscribed.

Embattled chairman, Gautam Adani, issued a statement, saying the decision was taken amid the fluctuations the company’s stocks witnessed during the day’s trading. Adani said it wouldn’t have been morally correct to go ahead with the FPO due to the unprecedented fluctuations in the group’s stock prices on Wednesday.

Adani pointed out that the group feels that the interest of the investors is paramount and “hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO.”

Adani Enterprises is working with its Book Running Lead Managers (BRLMs) to refund the proceeds received by it in escrow and to also release the amounts blocked into investors’ bank accounts for subscription to this issue.

Shares in Adani Enterprises, often described as the incubator of Adani businesses, plunged 30 per cent on Wednesday. Adani Power fell 5 per cent, while Adani Total Gas slumped 10 per cent, down by its daily price limit, Reuters reported.

Adani Transmission was down 6 per cent and Adani Ports and Special Economic Zone dropped 20 per cent. Adani Total Gas, a joint venture with France’s Total, has been the biggest casualty of the report, losing about $27 billion.

Underscoring the nervousness in some quarters, Bloomberg reported on Wednesday that Credit Suisse had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.

India’s markets regulator, which has been looking into deals by the conglomerate, has said it will add Hindenburg’s report to its own preliminary investigation.

State-run Life Insurance Corporation (LIC) said on Monday it would seek clarifications from Adani’s management on the short seller report. The insurance giant was, however, a key investor in the Adani Enterprises share sale.

Hindenburg Research published a report last week, accusing the Adani Group of indulging in improper use of offshore tax havens and stock manipulation while also raising concerns about high debt and the valuations of seven listed Adani companies.

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The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian law, adding that it has always made the necessary regulatory disclosures.

Hindenburg Research on Monday hit back at the Adani Group, day after the business house dubbed the New York-based firm’s report as “calculated attack on India.”

In a response titled “Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised,” Hindenburg Research accused the Adani Group of holding back India’s progress by draping itself in the Indian flag while systematically looting the nation.

Hindenburg said it believes that India is a vibrant democracy and an emerging superpower with an exciting future. However, the research group alleged that the country’s future was being held back by the Adani Group, “which has draped itself in the Indian flag while systematically looting the nation.”

Hindenburg stressed that it’s a firm believer in the fact that fraud is fraud even when perpetuated by one of the wealthiest individuals globally.

The Group’s chairman, Gautam Adani on Wednesday dropped to 15th on the Forbes rich list with an estimated net worth of $76.8 billion as the shares of his conglomerate plunged once again in the aftermath of the Hindenburg group report.

Before the scathing report by the US short-seller, Adani was ranked third on the list and also ranked Asia’s richest person, a title which he also lost after his personal fortune reportedly fell by over $40 billion.

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