Azim Premji will step down as chairman of software major Wipro in favour of elder son Rishad after leading the company through a tumultuous path for than 50 years. The Bengaluru-based company on Thursday announced the decision of Premji, 75, to quit as the executive chairman on July 30.
The market reaction to Azim Premji's exit could be seen as underlining confident in his judgment as a professional in choosing his successor. Wipro gained on National Stock Exchange (NSE) in early trade by going up to a hight of Rs 294.50 after opening at Rs 292.50 tracking the gain in the sector Nifty IT index.
Azim Premji will continue to be on the board as a non-executive director for another five years from July 31. He will also hold the title of founder chairman of the company. "Rishad Premji, chief strategy officer and member of the board, will take over as the executive chairman of the company (effective from July 31)," the Wipro statement said.
Wipro has conferred the additional role of managing director of Wipro to Abidali Z Neemuchwala, who also holds the roles of chief executive officer and executive director. Azim Premji has been holding the post of managing director until now.
"It has been a long and satisfying journey for me. As I look into the future, I plan to devote more time to our philanthropic activities," Premji said in a statement. "I have great confidence and trust in Rishad's leadership to steer Wipro in its next phase of growth as we move forward." Premji will continue to stay as chairman of Wipro Enterprises, the unlisted company in the group for non-IT businesses, the Business Standard website reported. He will also head Wipro-GE Healthcare, the company's joint venture with GE, according to the report
It was Azim Premji's vision that led a small hydrogenated cooking fat company to grow into one of the top three IT majors of the country in three decades. As an $8.5-billion IT services firm, Wipro is behind only Tata Consultancy Services (TCS) and Infosys in revenue.
Those who know Azim Premji personally say he always led by example, and for subordinates, he was a professional who backed them to take the decisions that would go on to make the company what it is today. The transition in Wipro has been deliberate and gradual just as Azim Premji would do it. Industry watchers say that unlike most family-run business houses in India Wipro has been working on a succession plan for some time, with Rishad being groomed to step into his dad's shoes.
As chief strategy officer, Rishad drives the company's mergers and acquisition strategy, apart from leading Wipro's $100-million venture capital fund, which invests in start-ups that develop new-age technologies, according to the report. As former chairman of the IT industry association Nasscom, Rishad is aware of the dynamics of the trade and proved his mettle by raising issues the industry faced.