India's Wipro shares jump on major Olam IT unit takeover
Shares of Wipro rose as much as 3.2% on Monday after the company agreed to acquire the IT services business of Olam Group for an enterprise value of $375 million.
The stock was last up 1.9% by 9:34 a.m. IST, making it the top gainer on the IT index, which rose 0.5%, News.Az reports, citing Reuters.
It was also the second-biggest gainer on the benchmark Nifty 50, which slipped 0.2%.
Olam Holdings will sell 200 million ordinary shares of Mindsprint to Wipro Networks, according to a statement released Monday.
Mindsprint provides technology, cybersecurity and digital services across industries including food and agribusiness, manufacturing, retail, consumer goods, healthcare and life sciences.
Analysts at ICICI Securities said the deal is Wipro’s largest acquisition so far and is expected to improve revenue visibility while strengthening its consulting, platform and sector-specific capabilities, particularly in the food and agribusiness segment.
They added the acquisition would bring domain expertise, intellectual property-led platforms and a captive delivery relationship, making the partnership more strategic than a typical outsourcing arrangement.
Olam has also signed an eight-year services agreement with Wipro, committing to annual spending of $100 million. Wipro said the total contract value is expected to exceed $1 billion.
Despite the gains, Wipro shares remain down 24.5% so far this year, compared with a 19.2% decline in the IT index.
News.Az
By Nijat Babayev
