Backstory: Wipro's turn of the century listing on NYSE

For India’s IT services giants, a listing on the US markets has always been a significant milestone. Among the big 5 firms, first off the mark had been Infosys in 1999 which chose NASDAQ, the newer of the US exchanges. But it was Wipro’s debut on the New York Stock Exchange (NYSE) in October 2000, that marked the coming of age of Indian IT.

On October 19, as the company’s chairman Azim Premji rang the opening and closing bells at the NYSE, Wipro became the first Indian IT company and just the third from across sectors to list on the 183-year-old US exchange.

Wipro raised just over $135 million from the share issue which was managed and underwritten by investment banks Morgan Stanley Dean Witter, Credit Suisse First Boston and Bank of America Securities. But the money wasn’t so important. As Premji explained to the media: “The main objectives were getting global currency for acquisitions and global stock options and building more credibility and brand among our customers.”

The IPO had been six months in the planning with an internal committee comprising, among others, Premji and CEO Vivek Paul carefully evaluating the two American exchanges. While NASDAQ, the preferred choice of IT stocks, was booming at that time, they eventually chose the more traditional NYSE since some of the biggest US companies including GE were listed there.

Over the next few months, Wipro’s top team along with an entourage from Morgan Stanley, traveled for pre-IPO roadshows across several cities in the US. It was the done thing for high-profile issues at the time, but of course, as in most other things with Wipro there was a difference. Flying first class and using stretch limos was the done thing. Premji, though, would have none of it. He might have been a billionaire but his habit of thrift wasn’t going to change merely because of an IPO. So it was a normal sedan in which 4-5 of the executives including Premji somehow fitted themselves in. The book Azim Premji: The Man Beyond the Billion says: “Flying first class was a definite no-no, and so at times the Wipro team would be sitting at the back while the bankers would be up front in business class.”

The Wipro stock under the trading symbol WIT, gained 10 percent by the close of listing day. Given the hiccups along the way, it was a satisfactory debut. When it filed for the issue a year earlier, Wipro had aimed to raise $300 million at a price of $63 per share. But the party in dotcom stocks was over and prices had started dropping. One unfortunate consequence of this was the scaling down of the Wipro ADR issue.

Already listed in the domestic market, the Wipro share at home had been on a tear in the run up to the US listing. Following a stock split in September 1999, the price of its shares had gone up nearly fivefold in less than six months. The biggest beneficiary of this surge was Premji, who with 84 percent of the holding, emerged as the world’s richest Indian, worth $39.5 billion. A number of executives at Wipro also came into serious money thanks to the employee stock option programme which had been introduced in 1984.

But the most significant product of the listing and Premji’s wealth surge was the Azim Premji Foundation which was set up in March 2001. It would go on to set new standards for philanthropy in the country.