FINANCIAL MANAGEMENT CIA-1

Company name: Wipro

Submitted By: Manya Bhutani
Registration: 2324342
Course: 2BBA-FMA-A
Date: January 10, 2024
Submitted To: Dr Dhakshayini
Introduction:
Wipro Limited, stylized in lower case as wipro, is an Indian
multinational corporation that provides information technology,
consulting, and business process services. It is one of the
leading Big Tech companies. Wipro’s capabilities range across
cloud computing, computer security, digital transformation,
artificial intelligence, robotics, data analytics, and other
technology consulting services to customers in 167 countries.

History
The company was incorporated on 29 December 1945 in Amalner, India, by
0Mohamed Premji. In 1966, after Mohamed Premji’s death, his son Azim
Premji took over Wipro as its chairperson at the age of 21. During the 1970s and
1980s, the company shifted its focus to new opportunities in the IT and
computing industry, which was at a nascent stage in India at the time. On 7 June
1977, the name of the company changed from Western India Vegetable Products
Limited, to Wipro Products Limited. In 1982, the name was changed again, from
Wipro Products Limited to Wipro Limited1. In 1999, Wipro was listed on the New
York Stock Exchange1.

Recent Developments
In 2004, Wipro became the second Indian IT company to earn US$1 billion in
annual revenue1. In 2012, Wipro demerged its non-IT businesses into a separate
company called Wipro Enterprises1. In March 2023, Wipro opened its American
international headquarters at Tower Center in East Brunswick, Middlesex
County, New Jersey1.

Notable Acquisitions
Wipro has made several notable acquisitions over the years. In 2006, Wipro
acquired California-based technology company cMango in an all-cash deal. In
2012, Wipro acquired Australian analytics company, Promax Applications Group
for A$35 million in an all-cash deal1. In 2015, Wipro acquired Denmark-based
design consultancy Designit for €85 million1. In 2016, Wipro acquired cloud
services consultancy Appirio for $500M.

Key Figures
As of 2023, Wipro has a revenue of US$ 11 billion, operating income of US$1.8
billion, net income of US$1.4 billion, total assets of US$15 billion, and total
equity of US$9.8 billion1. The company is owned by Azim Premji (73.85%)1 and
employs around 240,000 people1

Sources of Funds:
Capital Structure:

Wipro’s capital sources can be broadly categorized into equity and other financial assets. Here
is a detailed breakdown:

Equity
Wipro’s equity capital is primarily composed of its issued and paid-up equity capital. The
company’s authorized capital for the period 2022-2023 was Rs. 2500.9 crores, and its issued
and paid-up equity capital was Rs. 1097.6 crores1. The number of equity shares for the same
period was 5487917741 shares, each with a face value of Rs. 2.01.

Other Financial Assets

Apart from equity, Wipro’s capital also includes other financial assets. As per the latest financial
statement, these include:

● Goodwill: Rs. 309,525 crores2

● Intangible assets: Rs. 45,847 crores2
● Property, plant, and equipment: Rs. 90,147 crores2
● Right-of-Use assets: Rs. 19,381 crores2
● Derivative assets: Rs. 88 crores2
● Investments: Rs. 20,808 crores2
● Trade receivables: Rs. 4,626 crores2
● Other financial assets: Rs. 6,123 crores2
● Investments accounted for using the equity method: Rs. 782 crores2
● Deferred tax assets: Rs. 4,043 crores2
● Non-current tax assets: Rs. 11,450 crores2
● Other non-current assets: Rs. 14,045 crores2
Strengths weakness,etc…6 t
Wipro Limited, a leading technology services and consulting company, has a robust financial
and capital structure that has contributed to its dominant position in the market12345678.

Financial Structure:

Wipro’s financial structure is characterized by a strong balance sheet and impressive financial
performance19. The company has a low operating margin for other group companies10.
However, it has a successful track record of developing new products, which is a testament to
its strong research and development capabilities11. Wipro’s revenue for the financial year
ending on 31 March, 2022, was over INR 500 cr9. The net worth of the company increased by
20.13%, and the total assets increased by 22.28%9.

Capital Structure:

Wipro’s capital structure reveals a healthy mix of equity and debt, contributing to its financial
stability4. The company’s authorized capital is INR 2,527.40 cr, and the total paid-up capital is
INR 1,044.47 cr6. Wipro’s equity shares are listed on the Bombay Stock Exchange and the
National Stock Exchange of India, and its American Depositary Shares are listed on the New
York Stock Exchange8.

Wipro Technologies, a leading brand in the IT & Technology sector, has a strong position in the market. Here is a detailed
SWOT analysis of Wipro:

**Strengths:**
1. **Low Cost Advantage and High Quality Standards:** Wipro has a competitive edge due to its low cost and
high-quality standards¹.

2. **Broad Range of R&D Services:** Wipro offers a wide array of research and development services¹.

3. **Impressive Clientele and Partnerships:** Wipro has an impressive list of clients and partnerships with major
companies like Cisco, Oracle, EMC, Microsoft, and SAP¹.

4. **Large Workforce:** Wipro is one of the top IT companies in India, employing over 130,000 employees¹.

**Weaknesses:**

1. **Low Operating Margin:** Wipro's other group companies have a low operating margin¹.

2. **Limited Free Floating Stock:** The free-floating stock available for the investor is very less¹.

**Opportunities:**

1. **Sector Growth:** The IT sector is growing, providing Wipro with good opportunities¹.

2. **Diversification:** Wipro can diversify in brand product category and consulting services¹.

3. **Domestic Market Potential:** There is huge potential in the domestic market¹.

**Threats:**

1. **Economic Slowdown:** A slowdown in the US economy poses a risk as a major client base is from the US¹.

2. **Attrition and Employee Loyalty:** Employee attrition and loyalty are challenges for Wipro¹.

3. **Increasing Cost of Human Capital:** The increasing cost of human capital is a threat¹.

In conclusion, Wipro has significant strengths and opportunities that it can leverage for growth. However, it also
faces certain weaknesses and threats that it needs to address to maintain its market position. Despite these
challenges, Wipro's strong financial and capital structures position it well for future growth.
Solvex: A Business Innovation and Solution Platform:

Solvex is a platform that connects businesses with innovative solutions and experts from various
domains and industries. Solvex helps businesses solve their challenges, improve their performance,
and achieve their goals by providing them with access to a network of curated and vetted solution
providers and consultants.

Solvex’s value proposition is to offer a one-stop shop for business innovation and solution needs.
Solvex’s target customers are small and medium enterprises (SMEs) and startups that are looking for
cost-effective, customized, and scalable solutions for their business problems. InnoSolve’s revenue
streams include commissions from solution providers, subscription fees from businesses, and
advertising fees from sponsors and partners.

Solvex’s main competitors are other online platforms that offer similar services, such as Upwork,
Fiverr, and Freelancer. Solvex differentiates itself by focusing on quality, relevance, and impact of the
solutions and experts it provides. Solvex uses a proprietary algorithm and a team of experts to match
businesses with the best solutions and experts for their specific needs and objectives. Solvex also
provides feedback, reviews, and ratings for both businesses and solution providers to ensure
transparency and accountability.

Solvex’s vision is to become the leading platform for business innovation and solution in the world,
and to enable businesses to grow, thrive, and succeed in the digital age.

*Key Services:*

1. *Cloud Services:* TechFusion offers robust cloud services, helping businesses transition smoothly
to cloud-based operations.

2. *Data Analytics:* TechFusion provides data analytics services, enabling businesses to make data-
driven decisions.

3. *Digital Transformation:* TechFusion assists businesses in their digital transformation journey,

ensuring seamless integration of digital technologies into all areas of a business.
4. *Emerging Technologies:* TechFusion stays ahead of the curve by continuously exploring and
integrating emerging technologies into its service offerings.

5 *Innovation:* TechFusion plans to introduce a unique service called "HR Digitization". This service
aims to digitalize HR operations, making it easier for the workforce to carry out their daily HR tasks
while transitioning their business into a digital phase¹.

6 *Strategic Plan:* TechFusion's vision is to drive innovative solutions for its consumers and boost up
leadership globally. The company plans to focus on strategic growth areas such as cloud, enterprise
technology, and business transformation².

EBIT- EPS Calcu

The amount of funds needed is 1cr. Solvex Limited decided to sell shares of 1cr for 100 rupees each,
the ebit for the year was 11,65,000. The following is the calculation of eps to figure out the right
capital structure.

66:34 (Equity to Debt Ratio) 100% Equity

EBIT: 11,65,000 11,65,000

Interest @9% 3,06,000 0

EBT 8,59,000 11,65,000

Tax @18% 154620 2,09,700

EAT 7,04,380 9,55,300

Eps= EAT/Number of shares EPS= EAT/ Number of shares

EPS= 7,04,380/1,00,000 EPS= 9,55,300/1,00,000

=7.04% =9.55%