Wipro plans to issue ADR/GDRs

BANGALORE: Wipro has announced that its board of directors had passed a

resolution to raise equity in the overseas market in the form of either American

Depository Receipts (ADRs) or Global Depository Receipts (GDRs). Wipro is also

seeking blanket approval from the Reserve Bank of India for acquiring companies

overseas.

It is seeking approval for spending up to $500 million on acquisitions, to be

funded through cash or stock swaps, before the ADR issue and it also seeking

clearances for spending up to $10 billion using funds acquired through the ADR

issue and/or a combination of cash/stock swaps. A press statement said,

"The quantum of the issue is yet to be firmed up, but is not likely to

exceed $500 million.’’

Wipro has called an extra-ordinary general meeting on April 26 to seek

shareholders’ approval for this move. Senior Wipro officials stressed that the

announcement was only "a declaration of intent and that no specifics had

been decided about the issue size or the time frame in which this will take

place.’’ However, it’s expected that the ADR/GDR issue may go through in

the next 6-12 months. Morgan Stanley is likely to be lead manager for the issue.

The company also resolved to issue ADR/GDR linked stock options to employees,

subsidiaries and associates of the company up to a limit of $150m. The company

is expected to go to Nasdaq, the preferred destination of technology companies

for listing.