Wipro drops 11% after company's demerger plan

Bangalore: Shares in Wipro , India’s No. 3 software services provider, fell as much as 11.3 percent on Tuesday in the first trading session as a standalone IT stock after the company split off its other businesses into a separate unit.

Wipro’s split-off announced in November 2012 legally took effect on March 31, but was not reflected in its shares until Tuesday, meaning the company’s shares no longer take into account the contributions from its non-IT businesses.

Wipro’s shares were down 11 percent as of 10:27 am.

Wipro had offered shareholders various options including getting shares in the IT business, the listed company, in exchange for the value of their non-IT holdings or converting their holdings into shares in the privately held Wipro Enterprises Limited, the non-IT business.

Those options will no longer be available to anyone buying Wipro shares from Tuesday, with the record date, or the date for executing the options, set for April 11. It takes two trading days for a purchase to be reflected in a shareholders ‘demat’ or electronic account.

Wipro’s IT business accounted for about 94 percent of the combined company’s revenue.

Reuters