Wipro stock hits a 10-year high of Rs741 on report of $1billion ADR plan
14 Jan 2010
Shares of information technology major Wipro soared to a 10-year high following reports that the company is planning a sponsored issue of $1 billion in American depository receipts.
The Wipro stock rose 3.6 per cent to Rs741.1 in the Mumbai market today - the highest since 17 April 2000. Its ADRs gained 1.2 per cent at $23.7 in New York on Wednesday.
Business news channel ET Now said Wipro's Indian stockholders are likely to tender their shares in the sponsored ADR issue to take advantage of an arbitrage opportunity. Wipro's American shares are currently trading at an over 40 per cent premium to its Indian stock. The ADRs may be tendered on a pro-rata basis, the report said.
Wipro's ADRs traded at a premium of 51 per cent to the local share on the New York Stock Exchange yesterday. The ADR premium had risen to as much as 80 per cent over its Indian price in the US on 29 December, according reports.
Wipro itself will not gain from the share tender, the channel said, adding that the company's founder chairman Azim Premji might also tender some shares. Premji holds around 80 per cent in the company.
The report also quoted sources as saying that Goldman Sachs, Citigroup and Credit Suisse may manage the offer.
Wipro Ltd, the country's third-largest software exporter, did not confirm or deny the report and merely dismissed it as rumour.