600-odd investors in a village in Maharashtra hold about 4.5 million Wirpro shares|
(Tuesday, November 2, 1999-bs)
Santosh Nair in Amalner (Maharashtra)
Wipro chairman Azim H Premji may not exactly have been a household name in India till Forbes listed him as a bona fide billionaire. But the residents of Amalner, a hamlet 36 km from Jalgaon in interior Maharashtra, have sworn by him for years.
And with good reason. En route to becoming the richest Indian, Premji has added about Rs 650 crore to the kitty of 600-odd investors, who hold about 45 lakh shares of Wipro. That's almost 2 per cent of the company's total equity.
Why Amalner of all places? Well, Wipro set up its first ever edible oil plant in this village in 1950. The company has since gone from strength to strength -- and Amalner's investors have enjoyed the ride.
The majority of the investors have been holding on to Wipro since the late '70s, when it was a Rs 100 paid-up share. An investor who had purchased 50 shares of Wipro then would currently be holding 30,000 shares after two bonus issues of 1: 1, one 2: 1 bonus, and two stock splits: from Rs 100 paid up to Rs 10 and subsequently to Rs 2. In fact, some individual investors here hold about 3 lakh Wipro shares.
Till the late '80s and early '90s -- when Wipro shares were traded once a fortnight -- the investors used to buy and sell the scrip amongst themselves.
"Those in dire need of money would sell the stock to others who had surplus investible funds. Thus, most of the public holding has never really left Amalner," says Satish, an investor who regrets having sold the stock at Rs 230.
"Buy Wipro shares if a daughter is born in your house. You can marry her off with pomp from the profit on your investment. This is how AHP (as Premji is popularly known among these investors) persuaded us to invest in Wipro shares in the early '80s," says Sunil Maheshwari, a stock market consultant in Amalner. "I used the same catchline to convince my clients to buy Wipro shares," he says. Needless to say, there is enough money to marry off at least three to four generations of daughters.
The story does not end here. Wipro's dream run on the bourses has encouraged these investors to take a more active interest in stocks. However, holdings are restricted largely to software stocks.
The logic for investment is simple. If Wipro's share price is doing well because of its software business, other software companies should also do well. Despite the fact that the average investor here may not fully understand the implications of the Y2K problem, many of them have invested in Satyam Computer, Pentafour Software and Visual Soft at less than Rs 100.
Mind you, the village is largely cut off from the outside world. The general population here consists of small-time traders. Wipro is the only industry of note, there is no Internet connection, and financial newspapers are received very late in the day.
However, while the villagers may be willing to book profits in other stocks, Wipro represents an emotional attachment, something they are very reluctant to part with.
"Whenever an investor in Amalner has sold his holding in Wipro, rarely has he been able to buy it back at lower levels, " says Pankaj Ghosar, an investor in Wipro. And whenever investors have surplus funds, they buy Wipro before any other share.