The auction of 3.5 crore Wipro shares by Azim Premji Trust on Wednesday was under-subscribed with bids coming for only 71 per cent of shares on offer at close of bidding hours.
The floor price for the sale has been set at Rs.418 a share, which is at a discount of about 2 per cent to Wednesday's closing price of Rs.425.40.
The same method was followed during the sale of 5 per cent stake in ONGC on March 1. According to the latest data available with the bourses, the offer for sale of Wipro shares saw bids for 2.47 crore shares as against 3.5 crore scrips on offer. Based on the minimum bidding price, the sale of 2.47 crore shares would fetch at least Rs.1,034 crore. “Both ONGC and Wipro are blue-chip companies and if they saw muted response in their share auction, this is a wake up call for the promoters of other private sector companies,” SMC Global Strategist and Head of Research Jagannadham Thunuguntla said.
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The ONGC offer for sale was completed using the secondary market mechanism created by the NSE and the BSE. The final demand was for 42.04 crore shares against an offer of 42.77 crore shares.
Azim Premji Trust on Monday said it planned to utilise the proceeds from the share sale for scaling up the activities of Azimji Premji Foundation. The endowment supporting the foundation is held by the trust.
Azim Premji Trust held 8.66 per cent, or 213 million shares, in Wipro at the end of 2011 December quarter, as per the BSE data. The brokers for the proposed sale of 35 million shares were Citigroup Global Markets India Pvt. Ltd., Morgan Stanley India Company Pvt. Ltd., UBS Securities India Pvt. Ltd. and Credit Suisse Securities (India) Pvt. Ltd., a BSE filing by Wipro had said. — PTI
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