Wipro Shares Rise 4.5% Amid Partnership with ServiceNow

Wipro Shares Surge 4.6% on Expanded Partnership with ServiceNow

Shares of Wipro, an Indian IT services company, rose 4.6% on May 29, following an announcement that the company had expanded its partnership with US-based software provider ServiceNow to deploy agentic AI workflows across core enterprise functions, including IT, HR, procurement, and cybersecurity.

This expanded partnership will see Wipro integrate its unified suite of AI-powered platforms, solutions, and transformative offerings, Wipro Intelligence, with the ServiceNow AI Platform. The integration will enable organisations to streamline the initiation, orchestration, and execution of work across enterprise systems, according to Wipro.

The partnership is seen as a significant move by Wipro to bolster its artificial intelligence offerings, amid growing investor concerns that advances in AI could disrupt traditional outsourcing and technology services work. The sector has been under pressure after rapid advances in generative AI and a push by companies such as OpenAI into enterprise services reignited fears about long-term demand for conventional IT projects.

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Wipro's ADR Surges 19% Overnight on NYSE

Wipro's American Depositary Receipt (ADR) surged almost 19% overnight on the New York Stock Exchange (NYSE) following the partnership announcement with ServiceNow. This is the biggest single-day gain that the US-listed entity has seen since October 2008. Wipro ADR ended at $2.43 with a gain of 18.54% on May 28.

Market Reaction

At 9:52 am on May 29, Wipro shares were trading 2.2% higher at Rs 206 apiece, while the Nifty IT index snapped a two-day fall to trade nearly 2.5% higher. The sectoral index was trading higher with gains led by Infosys, Wipro, HCLTech, which climbed 4%, 2.2%, and 1.8%, respectively. The shares were the top Nifty gainers too, along with another IT giant TCS, which was up 1.76%.

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Wipro's Share Buyback Programme

Wipro stock has been witnessing steady buying after the company announced a share buyback at a price of Rs 250 per share, representing a premium of nearly 21% over its previous closing price. The IT major has fixed June 5 as the record date for the buyback, making shareholders eligible to participate in the programme.

Wipro's board had approved the proposal on April 16 to repurchase up to 60 crore equity shares through the tender offer route. The buyback size represents over 5 percent of the company's total equity share capital. The company had also stated that members of the promoter and promoter group intend to participate in the buyback programme.

This marks Wipro's first share buyback announcement in almost three years. The previous buyback was undertaken in June 2023, when the company repurchased shares worth Rs 12,000 crore between June 22 and June 30. During that programme, Wipro bought back 26.96 crore equity shares, equivalent to 4.91% of its total equity capital, at Rs 445 per share.