Shares of Wipro today closed with gains of 3 per cent after the company said it will demerge its three non-IT business divisions, including consumer products segment, into a new company to focus exclusively on information technology.
After surging nearly 7 per cent during the day, shares of Wipro settled at Rs 361.40, up 3.02 per cent on the BSE.
At NSE, the scrip closed at Rs 360.25, up 2.74 per cent.
In the process, the company's market value also surged Rs 2,605 crore to Rs 88,971 crore.
Analysts said that shares gained momentum on news that the company will focus more on its core business of providing software and related services.
"The move will allow Wipro to focus exclusively on IT which will have a positive impact on the stock. This will also enhance the company's profitability," Geojit BNP Paribas Research Head Alex Matthews said.
The new unlisted firm will include Wipro Consumer Care & Lighting (including furniture business), Wipro Infrastructure Engineering (hydraulics and water businesses) and Medical Diagnostic Product & Services business, Wipro said in a filing to the BSE.
Wipro Ltd will remain a publicly listed company that will focus exclusively on information technology, while Wipro Enterprises will be an unlisted company, the filing said.
The Board of Wipro Ltd will remain unchanged and the demerger will have no impact on the management structure of the IT major, it added.
Wipro Limited CFO Suresh C Senpaty said the demerger will improve the profit margins of Wipro Ltd than what the company did on a combined businesses.
In the broader market, the BSE benchmark Sensex ended at 18,561.70, up 56.32 points.
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