Wipro raises Rs 1,400 cr via external borrowings

Wipro Ltd, the $4 billion IT to consumer services firm, has raised close to Rs 1,400 crore (¥35 billion) through external commercial borrowings (ECB). The money, raised in the fourth quarter of the financial year 2008, will help the company in pursuing inorganic ways of growth.

Wipro had earlier entered into an arrangement with a consortium of banks, post which the company obtained ECB of approximately ¥35 billion. The company preferred to borrow in yen since the cost of borrowing is lower. The amount is liable to be fully repayable in March 2013, as per Indian regulatory guidelines. Most of the leadings banks 'equally' participated in the syndication, a company executive said without disclosing the names of the banks.

The company has been pursuing aggressive acquisition strategy for the last few years and it concluded two big bang acquisitions during the last financial year including Unza and Infocrossing for a cumulative value of close to $900 million.

Suresh Senapaty, CFO, Wipro, had said that the firm was looking at raising money through debt or through equity, to support it in the possible acquisitions.

"Yes, today we have funnel of acquisition targets which we are looking at and they are of different sizes. They are binary -it may happen and may not happen. We are in discussion with multiple target candidates for raising money," Senapaty had said.

As of March 31, 2008, Wipro had a cash and bank balance Rs 3,927 crore. Besides the company has investments of Rs 1,431.3 crore in liquid and short-term mutual funds. In every quarter, the company generates cash of about $200 million which is added to its cash reserve.

During the end of calendar 2007, Wipro had a debt burden of $700 million, which the company had raised from various banks at different point of time.