Paul Singer, a hedge fund manager, is known to shake up things in the corporate world and makes companies work towards offering better returns to shareholders.
Paul Singer, the billionaire who owns Elliott Management Group, has bought a small stake in Wipro Ltd. His hedge fund acquired 1.855 million American Depositary Receipts, which is 0.04 percent of Wipro’s share capital, according to a filing with the US Securities & Exchange Commission.
Now there are reasons why this can be significant. Singer is known to be an activist investor who forced Cognizant, where he owns four percent, to streamline the board and pay back $3.4 billion to shareholders. Analysts add that this move triggered others in the IT services industry to go ahead with a share buyback. Infosys too announced a share buyback worth Rs 13,000 crore.
India’s IT services is $167-billion in market opportunity and companies like Infosys, Wipro and TCS are changing their tech strategies, doing more with less, besides adopting a platform-based approach, to shore up margins because clients are tightening budgets.
Bloomberg once termed Singer as “aggressive, tenacious, and litigious”. His company manages $34 billion in assets and the man is known to have taken on Warren Buffet over investment strategy and has taken on countries such as Argentina about its debt crisis. Some of his well-known investments are in Samsung Electronics whose market cap has gone up by 45 percent; and in Arconic, a company in the defence sector, whose market cap has risen by 35 percent. He has investments in industries ranging from semi-conductor to pharma and logistics.
So, will he make an impact on Wipro by owning its stock? It could be unlikely because of the minute holding. That said, Wipro is undergoing a transformation too, and like an IT services provider, it is focussing on cloud, analytics and platform-based business models. Maybe he is reading into Wipro rising. Wipro was up Rs 5.80 on the BSE, by end of the trading session, and closed at Rs 290.85 per share.