Paul Singer’s Elliott Management buys small stake in Wipro in first India IT firm holding

Elliott’s holding in Wipro gives the fund another foothold in the nation’s $167-billion IT services industry at a time its main players are re-tooling to shore up margins amid tighter client budgets.

Billionaire Paul Singer’s Elliott Management Corp. has bought a stake in Wipro Ltd., its first ever purchase of an Indian-based software outsourcer.

Employees walk past Wipro Ltd. signage as they enter the company's campus in Bangalore, India. (BVivek Prakash/BLOOMBERG)

The New York hedge fund acquired 1.855 million American depositary receipts, or about 0.04% of Wipro’s share capital, according to a filing with the U.S. Securities & Exchange Commission.

Though tiny when compared with Elliott’s stake of more than 4% in rival Cognizant Technology Solutions Corp., which has the bulk of its operations in India, the holding in Wipro gives the fund another foothold in the nation’s $167-billion IT services industry at a time its main players are re-tooling to shore up margins amid tighter client budgets.

Elliott is known for shaking up companies. At Cognizant, it pushed for a board re-shuffle and a $3.4 billion return of capital to shareholders, setting off a wave of dividend and share buyback announcements among its IT peers. In recent years, its dispute with aluminum parts maker Arconic Inc. contributed to the resignation of Chief Executive Klaus Kleinfeld, and its activism helped spur changes at Australian mining giant BHP Billiton Ltd.

Billionaire founder Azim Premji owns over 73% of Bangalore-based Wipro. The company declined to comment on the purchase by Elliott.