Bengaluru-based top IT services major Wipro announced the merger of five of its wholly-owned subsidiaries with and into parent entity Wipro Limited.
The decision to merge Wipro HR Services, Wipro Overseas IT Services, Wipro Technology Product Services, Wipro Trademarks Holding and Wipro VLSI Design Services was taken at a board meeting on Wednesday in which the September quarter earnings were also approved.
The merger plan would require statutory and regulatory approval, including a nod from the National Company Law Tribunal (NCLT).
Wipro cited four reasons behind the merger decision — to consolidate business operations, enable synergies of operations, facilitate a reduction in overheads including administrative, managerial, and other expenditures, ensure optimised legal entity structure, and significantly reduce multiplicity of legal and regulatory compliances.
Since it involves wholly-owned subsidiaries, the merger will not involve issue of new shares and therefore there will be no change in the shareholding pattern.
While Wipro Overseas IT Services had zero revenue as of March 2023-end, Wipro HR Services reported revenue of Rs 67,753 crore, Wipro Technology Product Services Rs 85.3 crore, Wipro VLSI Design Rs 218 crore and Wipro Trademarks Rs 29 lakh.
In the quarter under revenue, Wipro reported a consolidated net profit of Rs 2,667.3 crore, up 0.70% year-on-year (YoY) while its consolidated revenue from operations rose marginally by 0.1% to Rs 22,515.90 crore.
“We ended the second quarter with 22 accounts above the $100M range, which is double the number we had in FY’21. Our large deal total contract value reached $1.3 billion — highest in the last nine quarters,” said Wipro CEO and MD Thierry Delaporte.
In the December quarter, the company expects revenue from IT services business segment to be in the range of $2,617 million to $2,672 million, which translates to sequential guidance of -3.5% to -1.5% in constant currency terms.
Source: Economic Times