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Wipro stock shoots after charity move

business Updated: Dec 02, 2010 21:36 IST
HT Correspondent
HT Correspondent
Hindustan Times

A day after chairman Azim Premji announced a philanthropy of Rs 8,846 crore, Wipro's share prices jumped 4.1% intra-day on Thursday before closing with a gain of 2.6% at Rs 425, in expectation of rise in liquidity even though the trust may not sell the shares immediately.

Premji had on Wednesday announced plans to transfer 213 million shares held by entities controlled by him to the Azim Premji Trust.

"The move will raise the free float and liquidity of its shares. The company will also get a higher weightage on the indices," said Gaurav Dua, research head, Sharekhan.

Higher liquidity in a stock increases its tradability and draws more investor interest. With 8.6% shares of the company's total equity that will get transferred into the trust, experts see a significant rise in the free float of the stock.

"The dividends may suffice the needs in a year and the endowment manager will decide if the shares should to be sold depending upon the requirement for funds," an official said.

Brand experts feel that such moves by promoters help in strengthening the brand.

"Any such move by the brand owner indirectly adds glory to the brand and the share price moving up shows the solidarity of investors. In the long term, the value will get reflected in the sales too," said Piyush Pandey, executive chairman, Ogilvy & Mather.