Wipro gains over 1% on shareholders nod for demerger

NEW DELHI: Wipro Ltd surged over 1 per cent in a lackluster session on Monday after the shareholders of soaps-to-IT services conglomerate have approved the company's demerger plan in a court convened meeting held in Bangalore on Friday.

“About 393 shareholders were present at the extraordinary general meeting including 18 from promoters and promoter groups,” TNN reported.

At 09:50 am, Wipro was trading 1.2 per cent higher at Rs 396. It has hit a low of Rs 392 and a high of Rs 398.50 in trade today.

The Bangalore-based IT company plans to hive off its non-IT businesses into a separate unlisted company to focus exclusively on IT sector. Premji currently owns 78.37 per cent, and as per SEBI guidelines the company needs to reduce this to 75% by June next year.

Under the demerger plan, Wipro shareholders have three options. They can receive one equity share with face value of Rs 10 in Wipro Enterprises for every five equity shares of Rs 2 each in Wipro that they hold; or receive one 7% redeemable preference share in Wipro Enterprises, with face value of Rs 50, for every five equity shares of Wipro that they hold; or exchange the equity shares of Wipro Enterprises and receive as consideration equity shares of Wipro held by the promoter.

The exchange ratio will be 1 equity share in Wipro for every 1.65 equity shares in Wipro Enterprises.

“Analysts saw the last option as a good and clever move to enable promoter Premji to reduce his stake in Wipro, so that the company's public float hits the SEBI mandated 25 per cent of total shares,” added the TNN report.