Wipro to clear bonus issue on April 16

Analysts expect 1:1 ratio

Two days after Infosys Technologies said it would consider a stock split or a bonus issue next week, Wipro said its board would meet to approve an issue of bonus shares on April 16.

While Infosys had worded its announcement ambiguously, Wipro was clear about a bonus issue, expected in a 1:1 ratio.

In 1999, Wipro offered a stock split of its Rs 10 paid-up share into shares of Rs 2 each paid up.

The last bonus issue was in 1998, when two bonus shares were offered for every one held. The bonus issue was announced for 45.8 million outstanding shares. Earlier, 1:1 bonus issues were announced in 1987, 1990, 1993 and 1995.

On the dividend front, Wipro announced a dividend of Rs 0.30 and Rs 0.50 per share in 2000 and 2001, respectively. The company paid a total dividend of 6.87 crore and Rs 11.62 crore against 229.16 million shares and 232.44 million shares, respectively, in these two years . Wipro is sitting on huge cash reserves and surplus cash, Rs 3,283.70 crore as on March 31, 2003.

According to Harish H V, practice director-South India, Grant Thornton India Pvt Ltd, a global accounting firm, "Wipro's announcement will only build up the positive mood among the IT stocks. The bonus issue will increase the share capital of the company and Wipro is telling its shareholders that it will continue with the trend of dividends even on an enhanced share capital."

MphasiS for 1:1 bonus

MphasiS BFL on Thursday proposed a bonus issue of shares in the ratio of 1:1. With this, the paid-up share capital of the company will increase from Rs 35.44 crore to Rs 70.88 crore.