Investor Elliott Management buys tiny stake in Wipro
Summary
BENGALURU: Elliott Management, the activist hedge fund that changed Cognizant’s business strategy, has taken a tiny stake in Wipro , highlighting its interest in Indian IT companies. Elliott Management disclosed in 2016 that it had a more than 4% stake in Cognizant and asked it to begin paying dividends, institute buybacks and shakeup its board. The fund, most recently, pushed for the shakeup of oil majors Hess and BHP Billiton.Elliott Management bought 1.85 million of Wipro’s American Depositary Receipts (ADRs) in the December quarter, 0.04% of its outstanding shares, filings with the US Securities & Exchange Commission (SEC) show. Following Elliott Management’s shakeup of Cognizant, a slew of Indian IT companies including Tata Consultancy Services and Infosys announced large share buybacks with a combined value of Rs 29,000 crore. Infosyswarned in its 2017 annual filing with the US SEC about the potential for activist investors to disrupt its working.IT experts said the unprecedented disruption that the industry is going through makes it an attractive target and that there are three ways in which an activist could ask companies to improve shareholder value — by increasing margins as a result of cutting investment, overheads and sales costs; consolidation or accelerating the move to the digital model.