Monday, November 5, 2012

Wipro,Demerger could help consumer care growth

The demerger of Wipro's non-IT businesses into a new unlisted entity,  Wipro Enterprises, will open the doors to potentially large acquisitions for the company's consumer care business. 
Vineet Agrawal, president of Wipro Consumer Care and Lightning (WCCL), told TOI, "The demerger will give us a lot more flexibility, if tomorrow we want to do a large acquisition. Earlier such a scenario could have been an issue viewed from the eyes of an investor, who's investing in Wipro."
T K Kurien, CEO-IT business, said, "In the consumer care business, if the return on capital employed is x, it is 2.5x in the IT business. So when you have to make an investment decision, and you ask yourself where you should put it, then the consumer business would get no investment. These are the kind of things that would change with the demerger."

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