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The Board of Directors of Wipro Limited in their meeting held 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 Limited. Wipro Limited will remain a publicly listed company that will focus exclusively on information technology. Wipro Enterprises Limited will be an unlisted company.
In fiscal year 2011-12, the IT business contributed to 86% of revenue and 94% of operating profit of Wipro Limited. The demerger is anticipated to provide fresh impetus for both Wipro Limited and Wipro Enterprises Limited to pursue their individual growth strategies. The demerger is also expected to improve the competitiveness in their respective markets.
The Board of Wipro Limited will remain unchanged, and the demerger will have no impact on the management structure of Wipro Limited. There will be no change in the leadership of any of Wipro Enterprises Limited’s constituent businesses. Wipro brand will be jointly owned by both the companies.
Azim Premji will remain Executive Chairman of the Board of Wipro Limited and will assume the position of Non-Executive Chairman of Wipro Enterprises Limited. “I am confident that the demerger will enhance value for our shareholders, and provide fresh momentum for growth. Each of our distinct businesses is best of breed in its respective industry, and we are committed to both the businesses,” said Azim Premji, Chairman, Wipro Limited.
“Creating a technology-focused company will allow us to better serve the needs of our customers, and accelerate investments necessary to capitalize on market growth opportunities,” said TK Kurien, CEO, IT Business and Executive Director, Wipro Limited.
“The businesses of Wipro Enterprises Limited are diverse, and this demerger gives them an opportunity to pursue their independent growth plans. I believe the demerger scheme reflects a high standard of governance, transparency and fairness for all stakeholders,” said Suresh Senapaty, CFO and Executive Director, Wipro Limited.