Wipro’s Bonus Issue: A 50x Return Story in 15 Years

Wipro’s recent 1:1 bonus issue has significantly boosted investor returns. A ₹10,000 investment in 2009, coupled with multiple bonus shares, has grown to over ₹5 lakh in 2024. This remarkable growth showcases the power of long-term investing and the positive impact of corporate actions like bonus issues.

CONTENTS:

• Wipro Shares Halved Post Bonus Issue
• Wipro Share Price Adjusted Post Bonus Issue
• Wipro Bonus Shares Boosted Investor Returns

Wipro’s Bonus Issue: A 50x Return Story in 15 Years

Wipro’s Bonus Issue: A 50x Return Story in 15 Years Wipro shares began trading ex-bonus on December 3, following the company’s 1:1 bonus issue, where shareholders receive one additional share for every share held. The record date for this corporate action was also set for December 3.

On the previous trading day, Wipro’s shares closed at ₹584.55 on the NSE, marking a 1.16% increase. However, on Tuesday, the stock opened at ₹291.90, reflecting a 0.12% decline. This halving of the share price is a normal adjustment due to the bonus issue, which increases the number of outstanding shares while keeping the overall investment value unchanged.

This is Wipro’s first bonus issue since 2019, when the company issued one bonus share for every three shares held. In 2024, Wipro shares have delivered a 22.56% return, outperforming the Sensex, which rose by 11.82% in the same period. For the September quarter, Wipro reported a 21% rise in net profit to ₹3,209 crore, despite a 1% decline in consolidated revenue to ₹22,302 crore compared to the previous year.

Wipro’s Bonus Issue: A 50x Return Story in 15 Years  Wipro shares appeared to drop by 50% on Tuesday, causing confusion among investors. However, this perceived decline is not due to a genuine fall in the stock’s value but rather the result of Wipro’s 1:1 bonus issue, which adjusted the share price to reflect the increased number of outstanding shares.

When a company issues bonus shares, the share price adjusts proportionally to maintain the overall investment value. In this case, Wipro’s stock turned ex-bonus, meaning shareholders will receive one additional share for every share they own. As a result, while the stock price appeared to fall from ₹584.55 to ₹295.50, this was merely an adjustment, not an actual loss.

Some trading platforms added to the confusion by displaying the unadjusted price from the previous day, creating the illusion of a 50% drop. This is Wipro’s first bonus issue since 2019, when it issued shares at a 1:3 ratio.

As of September 30, Wipro had ₹56,808 crore in reserves. After the bonus, its paid-up equity share capital will be around ₹20,926 crore, with over 10.46 billion shares in circulation. Despite facing a challenging demand environment, Wipro shows early signs of recovery, especially in its BFSI segment, and analysts believe its diversified portfolio and leadership under CEO Srini Pallia position it for potential growth.

Wipro shares appeared to plunge by nearly 50% on some mobile trading apps today, but this perceived drop is not a real decline in value. Instead, it stems from the company’s 1:1 bonus issue, which adjusted the stock price proportionally due to the issuance of additional shares. The discrepancy arose because certain trading apps displayed the unadjusted price from the previous day, creating the impression of a sharp fall.

On December 2, Wipro set the record date to identify shareholders eligible for the bonus shares, which will be credited shortly. The share price adjustment reflects the increase in outstanding equity shares, with each shareholder receiving one new fully paid share for every share they held.

As of September 30, Wipro had reserves totaling ₹56,808 crore, and post-bonus, its paid-up equity share capital is expected to reach ₹20,926 crore, comprising over 10.46 billion shares of ₹2 each. This is Wipro’s first bonus issue since 2019, when it issued shares at a 1:3 ratio. Previous bonus issues date back to the 1990s, demonstrating Wipro’s history of enhancing shareholder value.

Despite current challenges in demand, particularly client-specific issues, Wipro shows early signs of growth in its BFSI segment. Analysts view its diversified portfolio, new leadership under CEO Srini Pallia, and attractive valuations as a compelling risk-reward proposition.

Wipro’s Bonus Issue: A 50x Return Story in 15 Years 

How ₹10,000 Invested in Wipro in 2009 Grew to Over ₹5 Lakh: A Look at Bonus Shares’ Impact

If you had invested ₹10,000 in Wipro shares during the global financial crisis in 2009, when the stock traded around ₹50 per share, your investment would have experienced remarkable growth, primarily due to Wipro’s consistent bonus share issuance over the years.

Wipro’s Bonus Share History

Wipro shares turned ex-date for a 1:1 bonus issue on December 3, 2024. Investors holding the stock as of this record date will receive one bonus share for every share they own. This latest bonus marks Wipro’s fourth in the past 15 years. Previous bonus issues include:

1. 2010: 2:3 ratio (two shares for every three held)
2. 2017: 1:1 ratio
3. 2019: 1:3 ratio (one share for every three held)

These bonuses have significantly increased shareholder value over time. In 2009, an investor could purchase 200 shares for ₹10,000 at ₹50 per share. Thanks to the three previous bonus issues, those 200 shares would have multiplied to 888 shares by 2024.

Impressive Returns Over 15 Years

On December 2, 2024, Wipro’s share price closed at ₹584.55. With 888 shares, the investment would now be worth ₹5,19,080—representing a remarkable 51.9x increase in value from the initial ₹10,000.

The Role of Bonus Shares in Wealth Creation

This example demonstrates how corporate actions like bonus shares can drive substantial long-term gains. It underscores the value of patience and investing in fundamentally strong companies. Wipro’s consistent reward to shareholders through bonuses highlights its commitment to enhancing shareholder value, making it a prime example of how strategic investing pays off over time.