The Hindu Business Line : `More generous' dividend this year — India will continue to be most competitive: Premji

THE Wipro Chairman, Mr Azim Premji, has indicated a "more generous" dividend payout than in the past two years from its existing cash kitty of close to $1 billion.The company was on the lookout for mid-sized acquisitions in the US, Europe and India, he said at a press conference in New Delhi on Sunday.

"We have $1 billion in cash reserves which will be utilised for the payment of dividend and the acquisitions. The dividend payout ratio will be more generous than in the past two years, but in line with what we have indicated under the broad outline of the company's current dividend policy," Mr Premji, who owns 81 per cent of the company, said.

Mr Premji said Wipro was looking at mid-sized acquisitions in America and Europe, and also in the domestic market. "It will enhance our consultancy skills. We are not looking for general-purpose acquisitions, but at specialised verticals. We are looking for companies which can give us a good geography such as continental Europe," he said.

Expansion plans: In a bid to leverage on other low-cost locations, Wipro plans to set up an integrated IT and BPO facility in Bucharest (Romania) in the next 8-12 weeks.

"The centre would serve the markets of Germany and France. We are also looking at one more centre in Far East which will be more cost-efficient than China," he said. Wipro currently has centres in Shanghai and Beijing, he added.

The share of business from other low-cost countries would increase, he said but pointed out that India was still the most cost-effective destination.

"India churns out 3,50,000 engineers per annum while the US graduates 70,000 engineers. Germany graduates more architects than engineers. Engineering is not getting the desired attention in Western nations, and in three years, it will lead to a shortage of technical talent. It costs $7,500 for an engineer in India while the same is $55,000 in the US. Even with a 12 per cent salary hike in India, the cost per person will continue to be less here. India will continue to reign in terms of competitiveness", he argued.

Wipro BPO: "In addition to voice, we are driving the transaction processing business. It is 14-15 per cent of the total sales but in two years we hope to increase it to 40 per cent as it has a larger market share possibility," Mr Premji said. Wipro BPO currently has 14,000 employees.

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