India's third largest IT exporter Wipro Ltd is organising its shareholders meeting today at its Electronic City, Campus in Bangalore to discuss the demerger proposal the company has announced in November. The shareholders meeting is organised as part of the direction by the Karnataka High Court to discuss the same. The company had earlier said that the shareholders meeting is convened as it is a statutory requirement.
Earlier in November, the Bangalore-based company had announced a demerger plan to hive off its non-information technology (IT) businesses into a separate company. As per the demerger plan announced, the IT business of the company will be a listed entity under the name Wipro Ltd, while the non IT business including lighting, office-furniture, consumer care products, and infrastructure engineering services into a new non-listed entity called as Wipro Eneterprises. The non-IT servics business contribute about 14 per cent of the total revenues of the company.
“The company would seek shareholders approval with or without modification for the scheme of arrangement between Wipro Ltd (Demerged Company), Azim Premji Custodial Services Private Limited (Resulting Company) and Wipro Trademarks Holding Limited (Trademark Company),” the company stated in its earlier statement to BSE.
Wipro Limited, promoted by billionaire Azim Premeji intends to reduce the promoter's stake in the company through this demerger. Presently, the promoter holding in Wipro is about 78.31 per cent. As per SEBI guidelines the promoters would have had to pare their holdings in the company to below 75 per cent before June 2013. The market regulator has approved Wipro’s demerger route for the compliance of minimum public shareholding requirement.
According to reports in the media, the newly formed entity Wipro Enterprises Ltd is considering naming Rishad Premji, son of chairman Azim Premji, as a director. Rishad Premji, who is presently the Chief Strategy Officer of Wipro is on the board of Wipro GE Medical Systems Limited, a joint venture with American conglomerate GE.
When contacted by Business Standard today, a Wipro spokesperson declined to comment.
The company had said at the time of announcement of the demerger that Azim Premji would be non-executive chairman of Wipro Enterprises.