• MARCH 29, 2000

Wipro to come out with ADR and GDR issue.

Wipro Ltd. has decided to issue American Depository Receipts (ADR) or Global Depository Receipts (GDR) upto Rs 20 bn.

Wipro Ltd., with a revenue of Rs.18.3 bn for FY 1999 and current market capitalisation of Rs 240 bn is one of India’s top three software majors which is listed on the bourses. Wipro has recently achieved CMM 5 level of accreditation for software development.

The issue is expected to do well in view of the positive sentiment prevailing in favour of technology based stocks globally. Its revenues and net profits have been going up by 50% every year and are expected to double for the current year.

Wipro has lately made major strides in the areas of e-commerce and Internet related services in addition to consolidating on existing areas of ERP and software development services. It has also set up R&D centres all over the country to upgrade itself in all spheres of software development.

The funds from the GDR issue are likely to be used for acquisitions of overseas companies to complete Wipro’s expansion plans. This is all the more likely, because of the recent government announcement that Indian technology based companies can acquire overseas companies upto 10 times of their foreign earnings.

Market view:
Analysts have rated the stock as a ‘BUY”, in view of the several positive developments in the company over the last week, which include the proposed GDR issue, proposal to set up R & D centres, excellent expected results and the fact that the price has declined by 35 to 40% over the last month.

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