Wipro reboots on large overseas borrowing

Wipro rose 0.72% to Rs 483 at 12:02 IST on BSE on reports the company has raised close to Rs 1400 crore through external commercial borrowings.

The stock hit a high of Rs 486.90 and a low of Rs 480.35 so far during the day. The stock had a 52-week high of Rs 552 on 27 December 2007 and a 52-week low of Rs 325 on 22 January 2008.

The company has an equity capital of Rs 292.38 crore. Face value per share is Rs 2.

The current price of Rs 483 discounts its Q4 March 2008 annualised EPS of Rs 22.64, by a PE multiple of 21.33.

The company raised the funds through external commercial borrowings in Yen since the cost of borrowing is lower. The amount is liable to be fully repayable in March 2013, as per Indian regulatory guidelines.

The money raised in Q4 March 2008 will help the company to pursue inorganic ways of growth. The company has been pursuing an aggressive acquisition strategy over the last few years and it concluded two major acquisitions in the year ended March 2008 for a cumulative value of close to $900 million. As of 31 March 2008, Wipro had cash and bank balance Rs 3,927 crore.

Wipro provides comprehensive range of information technology (IT) services, software solutions, IT consulting, business process outsourcing and research & development services in the areas of hardware and software design to leading companies worldwide.

The company’s net profit rose 2.88% to Rs 827.30 crore on 22.17% rise in sales to Rs 5,275.10 crore in Q4 March 2008 over Q3 December 2007.