The net proceeds of Wipros overseas bond sale will be utilised for refinancing existing debt, general corporate purposes or any other purpose allowed under the law.
With a strong revenue forecast for the first quarter of 2021-22, the stage is set for faster growth as Wipro chases large cloud transformation deals from global clients, CEO Thierry Delaporte says.
The Wipro-Capco deal is the boldest bet by Wipro Chairman Rishad Premji and CEO Thierry Delaporte as the duo look to shed the company s image of a relative straggler in the Indian pure-play IT pack.
Earlier this month, Wipro said that it has signed a pact to buy Capco for $1.45 bn in cash, giving the much-needed firepower to bolster its position in the banking, financial services & insurance (BFSI) space.
Wipro employees at the company headquarters in Bengaluru on July 17, 2019. Synopsis Wipro has spent the last few years strengthening its banking-and-financial-services business. But the performance in the BFSI space has been patchy for most IT firms. With the pandemic expediting digital transformation across sectors, Wipro wants to assume a greater role and grab a bigger share of the pie. Can Capco help it achieve that? It’s the same story that plays out these days when it comes to digital-transformation programmes of businesses across the world. Broadly, the theme goes like this: The plot: A global company draws up its strategy road map for the adoption of digital technology to transform its business, and scouts for partners that can help it achieve the goal. The cast: The company (client) and its potential solution providers (a technology firm, an
Wipro believes there are significant synergies to be realised through cross-selling opportunities. (File photo) BENGALURU: Wipro will acquire London-based global management and tech consultancy Capco for $1.5 billion to bolster its presence in the banking, financial services & insurance (BFSI) space. The deal, which is Wipro’s largest acquisition ever, will also give the Indian tech services giant a strong consulting footprint. The deal comes under CEO Thierry Delaporte, who took over in July last year, and demonstrates a desire to regain the momentum the company has lost to rivals over the past several years. Wipro’s other big acquisitions include those of US-based cloud consultancy firm Appirio for $500 million in 2016, and of UK-based Infocrossing for $600 million in 2007.
Dalal Street gave a lukewarm response to Wipro s buyout worth $1.45 billion (over Rs 10,500 crore), its biggest ever, of London-headquartered Capco as the shares of the firm tanked 4 per cent on the BSE to Rs 421.30 in Friday s trade following the announcement of the deal. Wipro on Thursday said the acquisition will provide it access to 30 new large banking and financial clients and strengthen its position in the Banking, Financial Services and Insurance (BFSI) sector. The BFSI segment accounted for over 30 per cent of Wipro s IT services revenue in the December 2020 quarter that stood at $2,071 million. The deal comes at a time when businesses globally are betting on technology and increasing their spends on digital to support growth during the pandemic.
The Wipro-Capco deal would help Indian IT companies break into the big consulting league dominated by McKinsey and Bain & Co. They will now own the entire lifecycle—from consulting to building the technology architecture.
Wipro s $1.45 billion Capco deal unveils its bold and ambitious avatar The moot question then is whether the latest acquisition would bring Wipro back on the growth path and if yes then how soon. Synopsis It would be difficult to brush it off as just another acquisition not only for its size, but also for the potential it holds for Wipro, which has been aggressively looking for ways to accelerate its revenue growth. ET Intelligence Group: For Wipro, growth through acquisitions was never a dilemma; it was rather closely knitted to its business strategy. In fact, the country’s fourth largest IT exporter had acquired at least five outfits in the current fiscal year until Thursday when it announced plans to buy UK based Capco, a technology consultant to global financial institutions. However, it would be difficult to brush it off as just another acquisition not