Wipro rises after fixing record date for demerger

Wipro is trading higher by 3.4% at Rs 445 after the company said that the scheme of arrangement for demerging its non-IT businesses into a separate unlisted company called Wipro Enterprises is effective from March 31.

“The Scheme of Arrangement for the demerger of ‘Diversified Business’ of the company approved by the board of directors on November 1, 2012 is effective from March 31, 2013,” Wipro said in a regulatory filing.

The company has fixed April 11, 2013 as the record date for the purpose of determining the members of the company to whom securities of the resulting company will be allotted and who will be entitled to the exchange right pursuant to the scheme of arrangement.

As part of the deal, investors can receive one equity share with face value of Rs 10 in Wipro Enterprises for every five equity shares with face value of Rs 2 each in Wipro, or receive one 7% redeemable preference share in Wipro Enterprises, with face value of Rs 50, for every five equity shares of Wipro.

They also have the option to exchange the equity shares of Wipro Enterprises and receive as consideration equity shares of Wipro held by the promoter. The exchange ratio will be one equity share in Wipro for every 1.65 equity shares in Wipro Enterprises.

Each redeemable preference shares shall have a maturity of 12 months and shall be redeemed at value of Rs 235.20.

The move is aim to bring the best out of these businesses and allow the promoter to cut his stake in Wipro towards 75% to meet regulatory norms.

The stock opened at Rs 433 and hit a high of Rs 446 on BSE. As many as a combined 1.7 million shares have already changed hands on the counter till 1329 hours against an average around 1.5 million shares that were traded daily in past two weeks on BSE and NSE.