Wipro Share News: Here's Why Some Apps are Showing the Wrong Price - All You Have To Know
Shares of Wipro Ltd have been showing a dramatic 50% drop on certain trading platforms, sparking confusion among investors. On December 3, 2024, Wipro turned ex-bonus in a 1:1 ratio, which means that shareholders would receive one additional share for every share they already hold. But the adjustment caused a misleading interpretation on several mobile trading apps, leading investors to believe the stock had fallen by nearly half.
What is a Bonus Issue and Why Does It Affect the Stock Price?
A bonus issue is when a company increases its number of outstanding shares by issuing additional shares to existing shareholders. In this case, Wipro announced a 1:1 bonus issue, meaning shareholders would get one new share for every share they already own. This action doubles the number of shares in circulation and reduces the share price in proportion to the bonus shares issued.
Before the bonus issue, Wipro’s stock was priced at ₹584.55. After the bonus, the price was adjusted to ₹295.50, which is half of the original price. However, some trading platforms failed to adjust the stock price, showing the unadjusted price of ₹584.55, which led to the 50% fall being mistakenly attributed to market forces rather than the effect of the bonus issue.
The True Picture: Wipro’s Stock Was Actually Up
The confusion was rooted in the failure of some platforms to reflect the adjusted price. When Wipro shares were adjusted for the bonus issue, they were actually trading about 1.09% higher at ₹295.50, compared to ₹292.30 (adjusted price) the previous day. Therefore, the 50% drop that investors saw on certain platforms was not an actual loss in value but a result of the stock’s price adjustment.
Wipro’s First Bonus Issue Since 2019
This bonus issue is Wipro’s first since 2019, when the company issued shares in a 1:3 ratio. The current 1:1 bonus issue aims to improve liquidity and is seen as a positive move, especially given the current challenges in the IT services sector. Analysts believe that with the new CEO, Srini Pallia, at the helm, Wipro is positioned to capitalize on opportunities in its BFSI (banking, financial services, and insurance) vertical.
Wipro’s Future: Valuation and Growth Potential
Despite the confusion, the bonus issue has made Wipro’s stock more attractive in terms of valuation. While the company still faces client-specific issues, analysts are optimistic about its future growth prospects. The stock has become more attractively priced, making it a potentially lucrative option for investors looking for a better risk-reward profile.
Bonus Issue Details:
- Bonus Ratio: 1:1 (one new share for every share held)
- Record Date: December 2, 2024
- Paid-up Equity Capital After Bonus: ₹20,925.94 crore
- New Shares Issued: Approximately 10.46 billion shares
- Free Reserves and Surplus: ₹56,808 crore as of September 30, 2024
