INDIAN outsourcing giant Wipro on Thursday (November 1) announced that all its non-technology operations would be separated into a new firm, allowing it to focus on its core information technology business.
The Bangalore-based company said that its consumer care, lighting, furniture, infrastructure and medical businesses would become part of a new unit called Wipro Enterprises.
Wipro itself will then concentrate on information technology, which contributed 86 per cent of its revenues in the fiscal year to March 2012.
Its shares jumped as much as 6.8 per cent to a high of Rs375 ($6.97/£4.31) after the announcement.
Wipro, which is also listed on the New York Stock Exchange, competes with India’s top software firms Tata Consultancy Services and Infosys Ltd for IT services, consultancy and outsourcing.
The new firm will be unlisted, Wipro said in a statement.
“The demerger will enhance value for our shareholders and provide fresh momentum for growth,” said Wipro chairman Azim Premji, who has transformed an inherited cooking oil company into a software giant.
Premji, 67, known for his philanthropic activity, is India’s third-richest man, according to Forbes magazine.
“Wipro is sending a strong signal to the market that it is serious about its core IT business,” said Jagannadham Thunuguntla, head of research with SMC Global Securities.
Wipro is set to announce earnings for its fiscal second quarter from July to September on Friday (November 2).
