India's Wipro shares dive after business split
Shares in India's third-biggest software firm Wipro tumbled more than 11 percent on Tuesday, its first day of trading as a standalone IT company since it hived off other businesses into a separate unit.
The Bangalore-based company announced the demerger of its non-technology operations into a separate, unlisted firm in November but Wipro only became a standalone IT company on the stock exchange Tuesday.
Wipro fell as much as 11.41 percent to a day's low of 397.25 rupees on the Bombay Stock Exchange before retracing slightly to trade 11.05 percent lower at 398.90 rupees in the afternoon.
The tumble reflected that the earnings from its non-IT businesses will no longer contribute to Wipro's financial performance, analysts said.
However, they said they saw Wipro's demerger as ultimately a positive step that will help it to focus on its core IT business and make it more competitive.
A new unit, Wipro Enterprises, has been set up to embrace its consumer care, lighting, furniture, infrastructure and medical businesses.
Wipro's billionaire chairman Azim Premji inherited a cooking oil company and transformed it into a leading outsourcing services firm, which competes with rivals such as Infosys and Tata Consultancy Services.
IT services contributed 86 percent of Wipro's revenues in the financial year to March 2012.
Earlier this year, Wipro, which is also listed on the New York Stock Exchange, said its third-quarter net profit jumped 18 percent from a year earlier, led by outsourcing orders, despite global uncertainty.
(c) 2013 AFP