* Company aims to focus exclusively on its outsourcing
* IT business contributed 94 percent of operating profit in
fiscal year 2011-12
* Wipro to remain listed and shareholders will can choose
from three options
By Harichandan Arakali
BANGALORE, Nov 1 (Reuters) - Wipro Ltd, India's
No.3 software services provider, said it will fold all its
non-IT businesses into a new company and focus exclusively on
information technology, sparking a more than 3 percent rally in
its shares in Mumbai.
The new unlisted firm, known as Wipro Enterprises Ltd, will
include Wipro's consumer care, medical diagnostics and
infrastructure units, Wipro said in a statement to the stock
exchanges on Thursday.
Wipro's board will remain unchanged and the separation of
the non-core units will have no impact on the company's
management structure, according to the statement.
Separation of its non-core businesses will allow Wipro to
focus on IT, where it competes with Infosys Ltd and
Tata Consultancy Services Ltd. In the fiscal year
2011-12, Wipro's IT business accounted for 94 percent of its
Fierce competition and rising operating costs have eroded
the bottom line of some firms in India's $100 billion-a-year IT
Creating a IT-focused company will allow Wipro to
"accelerate investments necessary to capitalize on market growth
opportunities," said T K Kurien, CEO Of Wipro's IT Business.
Wipro shares rose 3.21 percent to 361.9 rupees at 0436 GMT.
Tata Consultancy and the broader market were little
changed, while Infosys was down 0.43 percent.
"I don't think it's a very material move, in the sense, when
people looked at Wipro, it was always as one focused on IT,"
said Bhavin Shah, chief executive of Equirus Capital in Mumbai.
"There are lot of positives internally that one hears about
Mr. Kurien, about steps taken for stronger focus on the IT
business, at some point if that starts delivering, certainly
that's what the market will really care about," Shah said.
Wipro is due to announce its earnings for the quarter ended
Sept. 30 on Friday.