Wipro to be excluded from NIFTY, shares tank
The Wipro board had approved the demerger of the non-IT businesses into a privately-held company.
New Delhi: IT major Wipro will be dropped from the National Stock Exchange's benchmark index Nifty from April 1 as its non-IT businesses are hived off into a separate unit. "A corporate action like our demerger of a listed company would generally result in a short-term withdrawal of the scrip from the index as it has been happening in the past where such corporate action had been initiated. We expect restoration of the same on completion of the corporate action, which we expect to conclude in the next few months," Bangalore-based Wipro said in a statement.
Shares of Wipro were trading at Rs 399 apiece in the early morning trade, down 2.59 per cent from its previous close. India Index Services and Products Ltd, an NSE-Crisil joint venture that maintains Nifty index, had on Wednesday said Wipro and Siemens would be replaced by IndusInd Bank and state-run NMDC on the 50-share benchmark index with effect from April 1, 2013.
In November 2012, the Wipro board had approved the demerger of the non-IT businesses -- Wipro Consumer Care & Lighting (including furniture business), Wipro Infrastructure Engineering (hydraulics and water businesses) and Medical Diagnostic Product & Services business -- into a privately-held company to be named 'Wipro Enterprises Ltd'.
The company believes the demerger will help in simplification, clarity in the minds of customers, target companies, investors and analysts. While Wipro Ltd would continue to remain a publicly listed company focusing exclusively on IT, Wipro Enterprises will be an unlisted company.