IT services major Wipro on October 18 announced that its board of directors has given the approval for the merger of five units with itself.
The company has decided to merge its wholly-owned subsidiaries - Wipro HR Services India Private Limited, Wipro Overseas IT Services Private Limited, Wipro Technology Product Services Private Limited (formerly known as Encore Theme Technologies Private Limited), Wipro Trademarks Holding Limited, and Wipro VLSI Design Services India Private Limited - with Wipro Limited.
The board, at its meeting on October 17-18, considered and approved the scheme of amalgamation, Wipro said in its stock exchange filing.
The merger scheme is dependent upon obtaining the required statutory and regulatory approvals, which include the endorsement of the National Company Law Tribunal.
An overview of the business domains of the five entities:
.Wipro HR Services India Private Limited provides services in the areas of human resources management, compensation, employee benefits, software development, research and training facilities, and information technology-enabled products and services.
.Wipro Overseas IT Services Private Limited is in the business of computer software development, web content management solutions and developing and implementing application software, web-based applications, onsite consulting and offshore software development services.
.Wipro Technology Product Services Private Limited develops software products for commercial purposes and licence them.
.Wipro Trademarks Holding Limited provides services relating to registration, acquisition and licensing of trademarks, brand name, designs, patents, copyrights and other intellectual property rights.
.Wipro VLSI Design Services India Private Limited is engaged in the business of manufacturing and developing all kinds of software including web and mobile phone software.
Rationale for amalgamation
Wipro Limited, giving its rationale for amalgamation, stated that the purpose is to consolidate business operations, enable synergies of operations, reduce overheads including administrative, managerial and other expenditures, ensure optimised legal entity structure, and significantly cut multiplicity of legal and regulatory compliances.
The development comes on the day when the Bengaluru-based IT major announced its Q2 results for financial year 2023-24.
As the Transferor Companies are entirely owned subsidiaries of the Transferee Company, there will be no allocation of Transferee Company shares in place of or in exchange for Transferor Company shares within the amalgamation scheme. Consequently, given the absence of any share issuance, the ownership structure of the Transferee Company will remain unaltered, Wipro said.
In the trading session on Otober 18, the scrip settled at Rs 407.40 apiece at the BSE, which was 0.94 percent (or Rs 3.85) lower as against the previous day's close.
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