Wipro cuts ADS price further, lists on NYSE

During the early trades on the NYSE, over 4.63 lakh Wipro shares were traded on the NYSE even as Chairman Azim Premji celebrated the listing by ringing the opening bell on Thursday.

During the first hour of trade, the scrip fell to $ 41 3/8 and went up to 44 9/16. The company was listed under the symbol WIT on the NYSE.

Wipro – which has planned an offering of 2.75 million ADS – had last week cut its ADS price from $ 63.86 to $ 52.48 following the fall in global markets. Investment bankers in the know of things said: "The price will definitely be lower than the earlier expected $ 52.48… somewhere in the range of $43 and $45."

However, even as Wall Street wakes up to Wipro’s long-awaited ADS listing,performance of the company’s scrip on domestic bourses has failed to reflect its optimism. Wipro share fell by 9.03 per cent to Rs 1,919 from Rs 2,109 on the BSE on Wednesday. The stock had fallen by nearly Rs 700 in the last two weeks.

Although the company claims to be upbeat on the reported 1.5 times over-subscription, market-watchers say it is a rather lukewarm response to a company of Wipro’s standing.

According to market analysts, the downward slip of ICE stocks in US markets will have a definite bearing on Wipro’s listing. The financial results of IBM (announced on Wednesday) have caused a negative fall in the Nasdaq, the impact of which was also visible in the domestic market.

Similarly, Microsoft’s results expected on Thursday would coincide with the listing of the Wipro ADS on Wall Street, and therefore, could have an impact on the listing, analysts said.

Following the downscaling of the company’s ADS pricing from $63.86 per share to the current rumoured $52.48 per share, Wipro’s American booty has shrunk from the earlier proposed $166 million to $144 million.

According to industry expectations, the company was to have gone full steam ahead with its acquisitions post-issue, but the unexpected downscaling has left the market wondering about the effects of the unrelenting markets on the company’s plans.

When contacted, a senior finance official with the company declined to comment on how the downscaling had influenced the company’s plans. "We were required by the SEC to report a share price depending on the market conditions. Keping in mind this factor, we went ahead with a pricing that we thought fit, and later revised suitably," the official said.

Historically, Indian companies listed on the American stock exchanges have seen their shares listing higher than the offer price and therefore Wipro’s listing price was expected to keep with the trend, he added.

Even as most of the company’s technology counterparts are trading on Nasdaq, Wipro’s decision to list on the NYSE after much market speculation came as a surprise.

Wipro officials were unwilling to comment on the strategy behind listing on Wall Street and the specific advantages it might give the company, besides probably a less volatile market to play in.