After a news article appeared recently that the promoters of Wipro were considering a stake sale in the company, the Chairman Azim Premji has issued a statement denying it categorically. He said,
Over the past 50 years, I have seen Wipro grow from a small regional player in vegetable oils to a global leader in technology. I continue to be incredibly excited about the potential of the IT industry and Wipro. I see enormous energy within the company to power the success of our clients and therefore the success of Wipro.
I remain as committed to Wipro as I have ever been. The news article about promoters of Wipro evaluating sale of their holding in the company is baseless and malicious. There is no truth to these unsubstantiated rumors.
He made the statement in response to an article by Malini Bhupta in Moneycontrol on Monday, which claimed that the promoters of Indiaâ€™s third largest IT company by revenues was in the early stages of evaluating the sale of the company or some of its units.
It even said that some investment banks had been approached to arrive at a fair value.
Azim Premji who is the founder and chairman, and his family own over 73% of the USD 7.7 billion company and are evaluating a possible exit in part of full, either to a multinational IT services company or a private equity player, the report said.
â€śAt this point of time, they have approached banks to understand what valuation they would get â€“ the mandate to the banks is to determine a price,â€ť a senior banker told Moneycontrol.
Even though the IT companies are presently struggling for growth, they are sitting on a pile of cash which makes them attractive to both private equity and multinational players, a merchant banker familiar with the Wipro development said.
The banker claimed that over the next 12-18 months, promoters of major companies will sell out to suck out the cash from them and there could be a change of guard.