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Premji on 'philanthropy' path to meet Sebi norm

Markets regulator approves proposal to transfer promoter holding in excess of 75% to irrevocable independent trust

BS Reporter  |  Mumbai 

Azim Premji

The Securities and Exchange Board of India (Sebi) has approved a unique proposal — Azim Premji-led transferring promoter holding to a philanthropic trust to achieve the 25 per cent public requirement.

The move would see the transfer of promoter holding in excess of 75 per cent in to irrevocable independent trust, which would carry out philanthropic activities. If hadn’t accepted this proposal, would have had to sell shares worth about Rs 2,500 crore through an for

Currently, Wipro’s promoter group owns 3.28 per cent excess stake, valued at about Rs 2,870 crore at current market prices. Today, the stock closed at Rs 355 on BSE, a rise of 0.8 per cent. As of today, the company’s market capitalisation stood at Rs 87,418 crore.

has approved its proposal to meet the minimum public requirement through a transfer of equity shares by the promoter group to an ‘Irrevocable Independent Trust’, with trustees either from public sector banks or public financial institutions, for advancing philanthropic activities through its beneficiaries,” said in a release. It added to meet the public requirement, Irrevocable Independent Trust would be categorised as ‘public shareholding’.

Within two years, would carry out a of equity shares, forming part of the trust fund, the company said.

So far, the Bangalore-based company, which had a promoter stake of 79.2 per cent in March 2012, had used multiple routes to reduce promoter holding. On March 14, 2012, it sold shares worth about Rs 750 crore at Rs 418 a share through an for Subsequently, promoter holding fell to 78.4 per cent. It also carried out a de-merger of its consumer business, which was expected to increase its public float.

The deadline for meeting Sebi’s 25 per cent public holding norm is next month. More than 100 would have to sell shares worth about Rs 15,000 crore to meet the minimum public rules. had to sell the most (Rs 2,867 crore at current prices) to meet the norm, followed by real estate major DLF (Rs 1,307 crore).

had introduced two new share-routes — for and institutional placement programme — to help meet the norm. Besides these routes, can also increase public holding by rights and bonus issues to public shareholders. has said it would consider other proposals on a case-by-case basis.

First Published: Fri, May 10 2013. 00:49 IST