Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now

You can switch off notifications anytime using browser settings.
Stock Analysis, IPO, Mutual Funds, Bonds & More

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.

, ET Bureau|
Updated: Feb 11, 2016, 06.18 AM IST
AMALNER: Azim Premji recently picked Abidali Neemuchwala to help rejuvenate Wipro. As the biggest shareholder in India’s fourthbiggest information technology company, Premji’s concerned about Wipro’s future, especially since some analysts don’t really think it merits a place at the top IT table. But what of those who became stakeholders when it was a producer of vanaspati?

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.”

Also Read

Share market update: Media shares gain; Zee Media climbs 4%

Share market update: Telecom shares mixed; MTNL jumps 5%

Share market update: Power shares advance; KEC International gains 3%

Share market update: Metal shares mixed; JSPL gains 4%

Share market update: FMCG shares trade higher; Dabur rises 1%

Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links

Follow us on

Download et app

Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service