Maharashtra's Amalner's residents hold Rs 3000-crore worth shares of Wipro
For Amalner’s Wipro shareholders, the stock has provided a dependable source of income. None of them would ever want to let go entirely.
Many still live in Amalner in Maharashtra’s Jalgaon district, some 350 kilometres away from Mumbai, where Mohammad Hussain Premji— Azim Premji’s father — set up a plant to make vanaspati, ghee and cooking oil in 1947. They aren’t so concerned about Wipro’s underperformance over the past few years. “I have inherited these shares from my father. Why should I sell them?” demands Ashish Pahade.
The stock was bought for a few hundred rupees in the 1970s and is now worth more than Rs 5 crore. Using his dividends, Pahade has started a small-time lending business. Arvind Muthe didn’t realise he owned the stock until a friend spotted his name in the list of shareholders in the annual report. The value of the shares his father left him was a few crore rupees, more than enough to pay off his debts and get out of a jam. The Daga family— two brothers and three sisters — inherited shares from their father who was a local agent for Wipro’s consumer products (bulbs, soaps).
Their combined holding of 5 lakh shares is currently valued at about Rs 28 crore. It’s estimated that people in Amalner hold more than 3% of Wipro stock, worth about Rs 3,000 crore at current prices. But the stakeholders — farmers, kirana shop owners, employees at local companies and retired people — are a down-to-earth lot.
There are few signs of overt affluence in what’s still a small town in the India’s sleepy hinterland. At the time of independence, farmers in the region cultivated groundnut, the source of the edible oil that Premji senior was selling through what was then known as Western India Vegetable Products Ltd. Shareholders didn’t see much by way of gains in the early years, recalled Shantilal Jain, who worked at the factory.
A rights offer in the late 1970s wasn’t fully subscribed and Jain was asked to help make up the numbers. He bought one share at a face value of Rs 100. It didn’t seem like a great deal. “Its price fell below the face value and there were no buyers even at Rs 35. Rs 100 at that time was not a small amount and it was not easy to sell it at a loss. So I decided to hold the share,” Jain said. Azim Premji would transform Wipro into a global IT services company.
The worth of that Rs 100 share, after adjusting for splits and bonuses, is now Rs 5.5 crore. Jain, who is 77, has sold some of it but still holds stock valued at more than Rs 1 crore. Rameshlal Korani has been able to build a house funded by Wipro dividends and stock sales. He’s named it Wipro. The biggest bet was probably that of Muhammad Anwar Ahmed. He happened to meet a broker who visited Amalner to buy Wipro shares from the locals in 1980. He invested Rs 10,000, half of all he had.
That’s worth Rs 500 crore now. Ahmed shifted from Amalner to Nashik a few years ago but still keeps in touch with friends and family. For Amalner’s Wipro shareholders, the stock has provided a dependable source of income. None of them would ever want to let go entirely, regardless of what analysts say. “Why should I sell all the shares and buy any other asset. Price volatility does not bother me.
Total dividends I have got are in crores and worth more than my shares’ value,” said Korani. Jain said: “If needed, I will sell 10-20 shares in a year but that’s it. As long as the company exists, these shares will remain with us. We trust Sethji (Premji). Whatever he does is will be good for us.”