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Exhibit 99.1
Press Release
Wipro Announces Restructuring Plan for
Wipro Net
BANGALORE, India and SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 20, 2000--Wipro
Limited (NYSE: WIT - news), a leading global provider of IT services to
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international companies, today announced that it has acquired a 45% stake in
Internet service provider Wipro Net Limited from Dutch telecommunications
operator KPN Telecom at Rs.1,088 million (US$23.25 million).
Wipro Net Limited was a joint venture between Wipro Limited and KPN Telecom
formed to address the emerging Internet services market. Wipro Net focuses on
the business requirements of the Indian companies and under the brand name "Net
Kracker" it focuses on retail customers.
Subsequent to the acquisition of the 45% interest from KPN Telecom, it is
planned that the retail ISP portion of Wipro Net will be spun off as a separate
entity, under the name Net Kracker Limited, to facilitate funding its ongoing
growth plans. Net Kracker was voted the best ISP in India for its speed,
support, features and availability by a user poll conducted by Chip, an
Information Technology magazine. Net Kracker currently has registered users of
over 35,000 and points of presence in 14 cities, within four months of its
launch.
Wipro Limited and ICICI Venture Fund Management Company Limited have entered
into an agreement that provides for Rs.300 million of investment for 51% equity
interest in Net Kracker Limited by ICICI Venture Fund Management Company
Limited. Wipro Limited will retain the balance 49% of equity along with
convertible preference share of Rs. 54 million in Net Kracker Limited. The
enterprise value based on the investment by ICICI Venture Fund Management
Company Limited is Rs.1500 million.
Following the planned spin off of the retail ISP business, the restructured
Wipro Net Limited will focus its service offerings in addressing the corporate
B2B space. The corporate ISP services business currently has a customer base of
over 1300 and with points of presence in 22 cities. Corporate ISP services of
Wipro Net had generated cash profit of Rs.8 million in the quarter ended
September 30, 2000. Wipro Net is the first ISP in India to have been recommended
for ISO 9002 for network management, service implementation and customer
relationship management.
About Wipro Limited:
Wipro Limited is a leading India based provider of IT services globally. Wipro
provides research and development services for hardware and software design to
technology and telecommunication
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companies and software application development services to corporate
enterprises.
In the Indian IT Market, Wipro addresses the IT and electronic commerce
requirements of Indian companies. Wipro has also maintained a substantial
consumer goods business with a profitable presence in the Indian niche markets
of soaps, toiletries, lighting products and hydrogenated cooking oils.
In addition to its New York Stock Exchange listing, Wipro's equity shares trade
in India on the Stock Exchange -Mumbai, National Stock Exchange, the Bangalore
Stock Exchange, the Delhi Stock Exchange, the Ahmedabad Stock Exchange and the
Cochin Stock Exchange.
About ICICI Venture Fund Management Company Limited:
ICICI Venture is the pioneer of the Indian Venture Capital industry. With an
aggregate fund corpus of US$400 million, it is the largest Fund Manager. It is
also the most accomplished with a highly successful track record, and enjoys a
leadership position in knowledge sector investments, having been instrumental in
building several leaders in these industries. ICICI Venture has also been the
first to formulate and implement the cross border investment strategy, through
which investments are made in companies based outside India, but leveraging the
Indian knowledge and skill base to effectively address the global markets.
Forward looking and cautionary statements
Certain statements in this release concerning our future growth prospects are
forward looking statements which involve a number of risks and uncertainties
that could cause actual results to differ materially from those in such forward
looking statements. The risks and uncertainties relating to these statements
include, but are not limited to, risks and uncertainties regarding fluctuations
in earnings, our ability to manage growth, intense competition in IT services
affecting our cost advantage, wage increases in India, our ability to attract
and retain highly skilled professionals, time and cost overruns on fixed-price,
fixed-time frame contracts, client concentration, restrictions on immigration,
our ability to manage our international operations, reduced demand for
technology in our key focus areas, disruptions in telecommunication networks,
counterproductive acquisitions, liability for damages on our service contracts,
withdrawal of fiscal incentives by government, political instability, legal
restriction on raising capital or acquiring companies outside India, and
unauthorized use of our intellectual property. Further information regarding
these and other risks and uncertainties is included in the company's United
States Securities and Exchange Commission filings.
