Bangalore: Wipro Enterprises Ltd will promote two senior executives to the board of the company recently spun off from India’s third largest software services provider Wipro Ltd, and is also considering naming Rishad Premji, son of billionaire chairman Azim Premji, as a director, two persons familiar with the plan said.
The consumer care and lighting business subsidiary of Bangalore-based Wipro will promote Pratik Kumar and Vineet Agrawal as board members, the two persons said on condition of anonymity. Kumar is president of Wipro Infrastructure Engineering and Agrawal oversees the consumer care and lighting business.
Wipro Enterprises is at present evaluating if Rishad Premji, 35, chief strategy officer of Wipro’s information technology (IT) business, could be appointed on the board to represent the family’s 80% shareholding in it, the two persons said.
If this happens, it will be the first time the Premji scion gets on to the board of a Wipro business unit; he joined the company in 2007. Before joining Wipro, Rishad, who has an MBA degree from Harvard Business School, worked at GE Capital in the US for four years and with Bain and Co., London, for two years.
A Wipro spokesman didn’t respond to an email query sent on Thursday.
“It cannot be ruled out, but no final decision has been taken yet,” one of the two persons cited above said, with reference to Rishad’s likely appointment. Rishad is already on the board of the Azim Premji Foundation, a philanthropic arm that works in the area of education.
“While it’s a possibility and something is being considered because of the family’s shareholding, a final call is yet to be taken,” the second person said.
A separate board for the newly created consumer products company will provide opportunities to veteran leaders Kumar and Agrawal, meanwhile, to play a bigger role in making strategic decisions as part of the unit’s highest decision-making body.
Experts tracking Wipro’s move to create a new non-IT entity said the new company will help create leaders who can work across business segments in the group, a tactic leveraged by top multinational firms such as General Electric Co. and Siemens AG.
“It can provide a broader organizational training ground and even a kind of leadership academy for executives and high potentials across the group,” said Peter Schumacher, president and chief executive of the Value Leadership Group, a management consultancy focused on strategy and organizational development. “The opportunity to shift executives between the (IT services and consumer goods) businesses can help create a stronger culture of learning and customer-mindedness, and even drive innovations from cross pollinating ideas and anchoring outside-in perspectives in the organizations.”
For years, Wipro’s software services business that accounts for 94% of the group’s operating profit and 86% of overall revenue, has hogged all the limelight from investors, media and experts tracking the company.
“We will also be looking to bring independent directors and anybody else needed to be a part of the board and can help in direction setting,” a third person aware of the plan said, also asking not to be identified.
Premji’s family, which includes Rishad, younger son Tariq and wife Yasmeen Premji, will hold 80% in Wipro Enterprises after necessary shareholder and regulatory approvals are obtained. Wipro will hold a meeting of shareholders on Friday to obtain approval for the spin-off after the Karnataka high court order of 26 November that had directed the company to get shareholder approval for the spin-off.
Azim Premji will be the non-executive chairman of Wipro Enterprises, the company said on 1 November. Wipro Enterprises will comprise Wipro’s consumer, medical diagnostics and infrastructure businesses, which together contribute less than 15% of Wipro’s sales and just 6% of its operating profits. The new company will remain unlisted and Wipro has no plans to take it public.
For Agrawal and other leaders across Wipro’s non-IT businesses, the new entity means sharper focus and faster decision-making.
“We will have a new board of directors. We were just 10% of Wipro Ltd and here we will have a much larger share. We should get a larger flexibility from the point of view that earlier one had to look at acquisitions and growth plans through the lens of the overall Wipro Ltd and how investors would react,” Agrawal had said in a November interview with Mint after the spin-off was announced.
On 8 December, Wipro said it would buy skincare products maker LD Waxsons Group for $144 million (around Rs.790 crore today) to expand its presence in Asian countries such as Malaysia, Singapore and China.
The non-IT businesses of Wipro have debt of Rs. 200 crore and, according to Mint calculations, are together valued at Rs. 10,500 crore. Wipro announced the plan to spin off its non-IT businesses into a separate company so as to focus on its IT business on 1 November.