Wipro, the soap-to-software services group, has received the shareholders? approval following the direction of the Karnataka high court for the demerger of its business between IT and non-IT.
In a notice sent to the Bombay Stock Exchange, Wipro said, ?In accordance with clause 35A of the listing agreement, we write to inform you that the shareholders at the court-convened meeting held on December 28, 2012, have approved the scheme of arrangement between Wipro Ltd (demerge company), Azim Premji Custodial Services Pvt Ltd (resulting company) and Wipro Trademarks Holding Ltd (trademark company).?
In November, the $7.37-billion conglomerate, Wipro Ltd, announced its plans to bring about a clear distinction between its IT and non-IT businesses. Under the demerger plan, the company will create a separate, unlisted entity (Wipro Enterprises) for its consumer care and lighting, infrastructure engineering, and medical equipment divisions.
This demerger is expected to bring better clarity between the two distinct businesses of Wipro and could lift the valuation of its mainstay IT business, which will be a listed entity. Azim Premji will remain as the executive chairman of Wipro Ltd and in a non-executive role in Wipro Enterprises.
The new unlisted entity will have a separate board of directors, resulting in greater focus. The Bangalore-based company has no plan to list the entity. Wipro officials earlier told FE that it expects the demerger to be completed by April-June 2013.
Vineet Agrawal, president, WCCL, earlier told FE that the demerger will give a lot more flexibility to grow both organically and inorganically. ?We don?t see the demerger having any major impact on us. From a financial perspective, Senapaty (the CFO) will continue to look after the finances of all the businesses, while Pratik Kumar will look after the HR practices,? he had noted.
