Join Hands to Build a Smarter India: Sign in | Join now
News

Will Wipro's Demerger Benefit Investors?

By SiliconIndia  |   Thursday, 06 December 2012, 04:45 Hrs
45
46
68
14
Print Email


Bangalore:  Recently Wipro has made a clear decision to separate its IT and non-IT businesses. This demerger definitely will give a strong boost to the non-IT sectors. It would under the name Wipro Enterprises, a new unlisted firm. The demerger was announced on November 1, 2012 and this move was meant to provide a strong focus on all the sectors, as the non-IT business has become large enough to demand a separate focus.



In fact the non-IT sector had also reached a point of total mass and it would have been very hard to segregate the businesses. This demerger definitely will give a strong boost to the non-IT sectors. It would under the name Wipro Enterprises, a new unlisted firm.



The non-It business units are Wipro Consumer Care & Lighting, Wipro Infrastructure Engineering and Wipro GE Healthcare and the interesting fact is that the non-IT sector was formed by Premji way before the company had started concentrating more on IT. The non-IT business is still close to Premji's heart, even though Wipro is much known for the IT businesses.



From the demerger move by the Chairman, it is clearly significant that Azim Premji wants to expand his business even more. And when it comes to acquisitions, IT companies are comparatively very cheap, with respect to the price. IT companies are valued at usually 1.5 times the yearly turnover, whereas non-IT can vary between 3-5 times the turnovers.



Wipro shareholders, because they come with an IT mindset, are unlikely to take kindly to such high valuations. "Evaluation criteria are quite different. Now, we don't have to be captured by that," says Agarwal, Director at Wipro.



Experts on SiliconIndia
Zafar  Ahmad
IT Project Manager
Infogain
Prakash  Kumar
Director IT
Delta Electronics In
Aakash  Mulchandani
Sr. Engg
Qualcomm
Siddharth  Sharma
Assistant Manager
Manipal
Guruprasad  Hegde
Founder and CEO
RealGuruu
Suresh  Avantsa
Founder
hubVirt Software
Chayan  Bhattacharjee
HR-Manager
TBG
Manoj Chandraprakash Powar
Managing Partner
Fountainhead
Sign Up for DailyDose and Read the Day's Highlights
Write your comment now
 
SiliconIndia About Us   |   Contact Us   |   Help   |   Community rules   |   Advertise with us   |   Sitemap   |  
News:       Technology   |   Enterprise   |   Gadgets   |   Startups   |   Finance   |   Business   |   Career   |   Magazine  |   Newsletter   |   News archive  
Cities:        CEO   |     Startup   |   Mobile   |   CIO   |   Women   |   BI   |   HR   |   SME   |   Cloud   |   Marketing   |   QA   |   Java   |   Web Developer  
Community:      Members   |   Blogs   |   Indian Entrepreneurs   |   Gyan   |   Advice   |   Community   |   Find   |   Events   |   CXO Insights  
Job Board:      Jobs   |   Freshers   |   Companies   |   HR Speak   |   Forum  
Online Courses:   Web Developer   |   Java Developer   |   CCNA Training   |   SEO   |   SAS   |   SQL Server 2005   |   J2EE
Education:   MBA   |   MCA   |   Engineering   |   Training Institute
Life:          Real Estate   |   Travel   |   Finance   |   Gadgets   |   Movie Reviews   |    Jokes  
Send your feedback and help us continue to improve SiliconIndia
© 2014 InfoConnect Web Technologies India Pvt Ltd. all rights reserved