Wipro has rallied 4% to Rs 364, after the company said that its board has approved the demerger of consumer care and lighting business unit into a separate company to improve the competitiveness in their respective markets.
“The board of directors of the company in their meeting held on today, approved the demerger of the Wipro Consumer Care & Lighting (including Furniture business), Wipro Infrastructure Engineering (Hydraulics & Water businesses), and Medical Diagnostic Product & Services business (through its strategic joint venture), into a separate company to be named Wipro Enterprises,” Wipro said in a regulatory filing.
Wipro will remain a publicly listed company that will focus exclusively on information technology (IT). Wipro Enterprises will be an unlisted company, it added.
“In fiscal year 2011-12, the IT business contributed to 86% of revenue and 94% of operating profit of Wipro. The demerger is anticipated to provide fresh impetus for both Wipro and Wipro Enterprises to pursue their individual growth strategies. The demerger is also expected to improve the competitiveness in their respective markets,” it added.
The stock opened at Rs 348 and has seen a combined 1.6 million shares changing hands on the counter in early morning trades.
