Premji To Gain Most If Wipro Parts Cash

Azim Premji and his trusts will be the largest beneficiaries if Wipro distributes part of its cash and cash equivalent of Rs 1,400 crore to its shareholders.

Assuming that Wipro decides to distribute 50 per cent of Rs 1,400 crore as a bonus or special dividend, Premji as the chairman and his trusts, which together hold 83.94 per cent in the company, will get a whopping Rs 587.58 crore.

Domestic shareholders, who hold only 7.12 per cent, will get to share only Rs 49.84 crore, and the remaining Rs 62.58 crore will be shared among foreign investors, private corporate bodies, mutual funds and overseas corporate bodies.

Premji, in his individual capacity, may take home Rs 28.14 crore as he holds 4.02 per cent of Wipro's equity. But Premji's trusts will emerge richer by Rs 489.58 crore, given their holding of 69.94 per cent in the software company. The promoter-directors, who hold 9.78 per cent equity, stand to gain Rs 68.46 crore.

The financial statement for the year ended March 2002 shows that the company has working capital of Rs 1,398 crore. The working capital has been spread among inventories (Rs 75 crore), debtors (Rs 643 crore), cash and bank balances (Rs 294 crore) and loans and advances of Rs 981 crore. The company has liabilities of Rs 600 crore.

However, keeping in view the company's conservative dividend policy, it is unlikely that the board will go in for a major bonus or rich dividends. During the year ended March 2002, the company's payout was a marginal 2.68 per cent of its net profit of Rs 866.10 crore. In the year ended March 2001, the payout was 1.74 per cent, and in March 2000, it was 2.28 per cent of net profit. The last liberal payout was 27.62 per cent in 1994.