India's Wipro shares dive after business split

Apr 09, 2013

Shares in India's third-biggest software firm Wipro tumbled more than 11 percent on Tuesday, its first day of trading as a standalone IT company since it hived off other businesses into a separate unit.

The Bangalore-based company announced the demerger of its non-technology operations into a separate, unlisted firm in November but only became a standalone IT company on the stock exchange Tuesday.

Wipro fell as much as 11.41 percent to a day's low of 397.25 rupees on the before retracing slightly to trade 11.05 percent lower at 398.90 rupees in the afternoon.

The tumble reflected that the earnings from its non-IT businesses will no longer contribute to Wipro's , analysts said.

However, they said they saw Wipro's demerger as ultimately a positive step that will help it to focus on its core IT business and make it more competitive.

A new unit, Wipro Enterprises, has been set up to embrace its consumer care, lighting, furniture, infrastructure and medical businesses.

Wipro's billionaire chairman Azim Premji inherited a cooking oil company and transformed it into a leading outsourcing services firm, which competes with rivals such as Infosys and .

IT services contributed 86 percent of Wipro's revenues in the financial year to March 2012.

Earlier this year, Wipro, which is also listed on the , said its third-quarter net profit jumped 18 percent from a year earlier, led by outsourcing orders, despite global uncertainty.

Explore further: Sony forecasts $2B loss as smartphones lag (Update)

add to favorites email to friend print save as pdf

Related Stories

Wipro hives off non-IT businesses, stock gains

Nov 01, 2012

(AP)—India's Wipro will separate its core information technology business from its consumer care and lighting, infrastructure engineering and medical diagnostics businesses, the company said Thursday.

Wipro profits up 18 pct on strong demand

Jan 18, 2013

Wipro reported an 18 percent rise in December quarter profits Friday, beating expectations as global cost-cutting drives global businesses to Indian outsourcing companies.

India's Wipro positive despite global uncertainty

Oct 31, 2011

Indian IT outsourcing giant Wipro on Monday projected a positive outlook for the industry, despite gathering clouds over the global economy, as it announced a rise in quarterly profits.

Wipro posts 9.7 percent profit rise, below forecast

Oct 22, 2010

India's third-biggest software firm Wipro reported Friday a lower-than-forecast 9.7 percent rise in quarterly net profit, blaming a higher rupee and wage costs for the disappointing earnings.

Recommended for you

News Corp opposes Google in EU antitrust case

11 minutes ago

The media conglomerate controlled by Rupert Murdoch is joining the fray in Google's protracted European antitrust case, saying the technology company unfairly distorts competition.

Apple iPhone lacks 'key' licence in China

2 hours ago

Apple's iPhone 6 still lacks a key network access licence in China, state media confirmed Thursday on the eve of its global launch, breaking official silence on why sales of the smartphone will be delayed.

Ericsson to stop making modems, shed hundreds of jobs

2 hours ago

Swedish telecom equipment company Ericsson said on Thursday that it would stop developing modems, a decision affecting almost 1,600 employees worldwide which is expected to lead to hundreds of job cuts.

User comments : 0