The merger involves five companies wholly owned by Wipro Limited. Five companies namely Wipro HR Services, Wipro Overseas IT Services, Wipro Technology Product Services, Wipro Trademarks Holding and Wipro VLSI Design Services will be merged into the parent company Wipro Limited.
Meanwhile, the decision taken by Wipro’s board of directors meeting to merge the subsidiaries also needs approval from regulatory and legal agencies, including the National Company Law Tribunal (NCLT). As it is a merger of wholly owned subsidiaries, there is no need to issue new shares. So there is no change in the shareholding pattern of Wipro.
Wipro Overseas IT Services has no revenue as of March 2023. According to the records till March 2023, Wipro HR Services reported Rs 67,753 crore, Wipro Technology Product Services Rs 85.3 crore, Wipro VLSI Design Rs 218 crore and Wipro Trademark Rs 29 lakh.
The meeting of the board of directors of Wipro pointed out that there are four reasons behind the merger of the companies, which are integration of business activities, cooperation between various departments, reduction of costs including administration, perfection of the legal structure, and significant reduction of recurring expenses for legal and administration.
Wipro: Financial Results
Wipro’s net profit for the July-September quarter of FY 2023-24 did not register a significant growth. The company’s net profit for the September quarter was Rs 2,667.3 crore. An annual increase of only 0.7 percent. Meanwhile the consolidated revenue of the company is 22,515.90 crores. Annual growth was only 0.1 percent.
The total value of large contracts won by Wipro in the September quarter was $1.3 billion (roughly Rs. 10,800 crore). This is the largest contract value for the company during the last nine financial quarters. In the guidance report released by Wipro along with the September quarter results, the company’s performance is not expected to grow significantly during the December quarter as well.