Making good the giving pledge: Premji sells Rs 7,300 crore shares in Wipro buyback

BENGALURU: Azim Premji and the promoter group of Wipro Ltd have sold stock worth over a billion dollars (Rs 7,300 crore) in the buyback programme announced by India’s fourth-largest IT services company. The bulk of the funds will likely be used to boost the philanthropic initiatives of India’s most generous billionaire whose eponymous foundation is one of the five largest private endowments in the world and the biggest in Asia.

Wipro said on Wednesday that its founder-chairman and entities controlled by him had sold 224.6 million shares in the recent share buyback programme, amounting to about 3.96 per cent of the total equity stake held by them.

In March, Premji had gifted all the earnings from 67 per cent of Wipro shares — then valued at over Rs 1.45 lakh crore, or $21 billion — to the Azim Premji Foundation.

The Azim Premji Foundation works with the government as well as teachers to improve the quality of primary education in public schools across several states.

“All the money Premji has committed to the trust is for philanthropy. It goes into a corpus,” said KR Lakshminarayana, chief endowment officer of Azim Premji Foundation.

In response to ET’s queries, a representative for Wipro said the company “cannot comment on the end use of the funds received under buyback by promoter entities”.

“As previously disclosed, founderchairman Azim Premji has irrevocably renounced 67 per cent of the economic ownership of Wipro to the Endowment which supports the philanthropic activities of the Azim Premji Foundation,” Wipro said in a statement.

The Premji family and entities held by them own 73.83 per cent stake in the software exporter. After the share buyback, promoter holding will increase to 74.05 per cent as Wipro will cancel the stock that it has bought back. Analysts are upbeat about the positive influence of Premji’s initiatives on India’s nascent philanthropy ecosystem.

“They (Premji and his trusts) are the largest givers in this continent. They have been supporting a variety of activities such as nutrition, domestic violence, independent media, empowerment of adolescent girls and education,” said Deval Sanghavi, cofounder of venture philanthropy fund Dasra.

“As India progresses to become a middle-income country, large international donors will start pulling out. At that stage, we will need hundreds of Azim Premjis to help solve some of India’s pressing needs,” he added.

Decline in big-ticket donations

The Indian Philanthropy Report released earlier this year by Bain & Company estimated that excluding donations by the Bengaluru-based software mogul, donations of Rs 10 crore and above have declined by 4 per cent since 2014. This, even as the proportion of the ultra-rich — individuals with a net worth of over $50 million — grew 12 per cent during the same period.

The Azim Premji Foundation plans to establish a second university in North India in addition to the one that it runs in Bengaluru. It also supports nonprofit organisations with grants, and has helped over 150 outfits engaged in a range of domains across India in the past five years.

The initiative to support other not-forprofits by providing multi-year grants was launched in 2014 and has helped the Azim Premji Foundation move beyond education — its primary focus.

In April, Wipro’s board had announced that the company would buy back 323 million shares at Rs 325 apiece with a total commitment of Rs 10,500 crore.