GE snaps business ties with Wipro

Post-ADR Premji still holds 85 per cent stake in the company which was listed as a risk factor No one in its ADR prospectus.

In a swift move last month, GE terminated all its contracts with Wipro officially saying that its billing rates are higher than the prevailing market rates. GE was contributing to about 10 per cent of Wipro’s revenues which could reflect in its profitability for the fiscal ended March 2001.

Privately-held Patni Computers has already offered 20 per cent stake in the company to GE. When contacted, a GE spokesman refused to comment on the developments.

Earlier, GE had taken off Infosys from its list of outsourcing software and is now busy developing its own software centres in Bangalore and Hyderabad.

Wipro is one of India’s leading software companies with the highest market capitalisation among the Indian coroprate sector at over Rs 53,000 crore.

After its divorce from GE, Wipro, with a staff strength of 7,000 software professionals, has already moved its over 900 software developers from the company to other projects.

Insiders say that Wipro is now looking at alternative source of business development to tide over the GE crisis. For the quarter ended September this year, the company’s sales turnover was Rs 740 crore and its gross profit soared to Rs 194 crore, a jump of 111 per cent over the same period of last year.

Wipro’s market cap crashed from Rs 70,000 crore on December 8 to Rs 52,433 crore by December 28. Its share prices also plummeted from around Rs 3,000 to Rs 2292 in the last three weeks.