stake sale plan

Stake sale by Wipro, Infosys founders unlikely due to emotional attachment

Stake sale by Wipro, Infosys founders unlikely due to emotional attachment (File photo) Representational image

Despite false market and media speculations about stake sale by former promoters in the case of Infosys and by the promoter and majority stake holder in the case of Wipro, many experts feel that the sale is very unlikely anytime in the future as they are emotionally attached to the companies which were built by them brick by brick. They would not want to part with any stake in the company whatsoever as for them emotional attachment is more important than any monetary gain from selling their stake.

“In the case of Wipro, Azim Premji has built the company from scratch. He doesn’t need money and managing Wipro is like running a mammoth enterprise with lakhs of people working under him. Maybe his son Rishad Premji may have some other plans, but that is also very unlikely right now. It is not only in India but worldwide in firms such as Ford Motors and Walmart where the main or former promoters have maintained interests” said Kris Lakshmikanth, the founder of the recruitment firm Head Hunters India Limited who has been following the company ever since it began operations. He further said there were speculations with regard to the performance of Wipro’s stock in the US market but there was no drastic change in the Indian market which means there is no fundamental problem with Wipro’s stock which remained steady in the Indian market.

On the other hand, as far as Infosys is concerned, the former promoters and c-founders N.R. Narayana Murthy and Nandan Nilekani besides others are unlikely to sell their shares in the company as they have an emotional connect with the company. “They have raised this company like a baby and they get regular dividends from it as part of their shares even though the company is facing challenging times due to an uncertain IT environment. Besides this Infosys is a cash rich company and has cash reserves; so it is unlikely the former promoters would completely exit from it. Due to the emotional connect the founders keep on regularly monitoring the steps and decisions taken by the Infosys board and raise a hue and cry if they are dissatisfied with any of the board’s decisions. If they completely exit they will lose complete control of any such say in the company matters and that is a very unlikely situation,” added Lakshmikanth.

IT expert Alok Shende of Ascentius Consulting feels that a sale of stake by the Infosys founders is an unlikely event as the main questions arises why they would like to sell their stake and what they will gain from it. “There is nothing unusual about market speculations which are sometimes raised by some sections in order to create some confusion in the market especially amongst investors and customers. Currently, the IT industry is struggling and even if a promoter wants to sell his stake, it is not at all an appropriate time to sell their stake. It would be better to wait and watch for sometime till there is some revival in the industry and the company reshapes up and witnesses steady growth for these promoters,” said Shende.

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Topics : #Wipro | #Infosys

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