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Vishwanath Kulkarni

Bangalore , Sept. 3

WEP Peripherals, formerly Wipro e Peripherals, has initiated an offer to buy back up to 15 per cent of its equity at Rs 26 per share.

The initial response for the company's buyback offer, which opened last week, has been lukewarm, as shareholders, especially employees of WeP and Wipro Ltd, are unwilling to part with their stake, said Mr Ram Agarwal, CEO and Managing Director, WeP Peripherals.

Employees of WeP Peripherals and Wipro Ltd hold 25.34 per cent and 25 per cent of the company's equity, respectively. While Wipro Ltd's holding stands at 38.15 per cent; the rest is held among NRIs, business associates and others.

Depending on the response to the buyback offer, the company would decide on going public after April 2004, he said. WeP, which has a cash surplus of close to Rs 15 crore, was funding the buyback offer through its internal accruals, he said.

For the current fiscal, the company was targeting a topline growth of 15 per cent even as it sought to improve its operating margins by focusing on high-value products, Mr Agarwal said. The company reported a net profit of Rs 4.17 crore over sales of Rs 199 crore last year.

Wipro's association with the company came to an end recently as WeP transformed itself from a division of Wipro to an independent company over the last three years. The company had successfully built its own brand identity sans the Wipro tag, Mr Agarwal said.

According to the three-year handholding period agreement, the company was supposed to relinquish the rights to use the Wipro brand name with itself after August 2003.

WeP expected to strengthen its brand in the marketplace and was focusing on its UPS business, exports, storage and communication business, after-market business and the print-and-save business, Mr Agarwal said. The company, which forayed into UPS business about 18 months ago, had garnered a market share of close to 25 per cent in the branded segment, he said. "Recently, we became the first Indian company to sell one lakh UPS units," he added.

WeP, which has made considerable headway in the domestic peripherals market, is now planning to boost its exports. Last year, the company's export revenues stood at Rs 16 crore. "We expect to grow our exports by 50 per cent this year," he said.

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WeP Peripherals buyback offer gets tepid response

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