Bangalore: IT major Wipro Limited on March 12 announced it would spin-off its fluid power business unit into a subsidiary company, and also that Netkracker Limited is set to become a subsidiary of the Bangalore-headquarterd company.

The New York Stock Exchange-listed company, in a resolution approved by its Board of Directors on March 12, gave green signal to the spin-off of the Wipro Fluid Power business unit into a subsidiary company effective March 1, subject to shareholder nod.

The company also announced that it had reached an agreement to purchase the equity interest in Netkracker Limited held by venture capital funds of ICICI Group for a total consideration of Rs 3 crore, and a contingency consideration, which is not expected to be material.

Consequent to the purchase of equity interest, Netkracker becomes a subsidiary of Wipro Limited, a company release said.

Wipro said the Fluid Power business unit and Netkracker would be combined and renamed as Wipro Fluid Power Limited, whose chairman would be Azim Premji, while M Seethapathy Rao, the current President of the Wipro Fluid Power business unit, would be appointed its Managing Director.

Commenting on the restructuring, Wipro Limited's Chairman Azim Premji said being a separate entity would allow the Fluid Power business to pursue its growth opportunities more aggressively, including the option to seek strategic investors to partner in its growth.

PTI