Wipro Not Hit by GM Bankruptcy
Wipro Ltd, India’s No.3 software services firm, said on Wednesday accounts receivable from General Motors was less than $8 million and will not be hit by the US automaker’s bankruptcy filing.
In a communiqu to the Bombay Stock Exchange, Wipro said, "General Motors accounts for less than 1% of Wipro’s IT Services segment revenue. But that contributes to a substantial portion and the partnership is expected to continue. Our accounts receivable as on the date of filing is under $8 million. Based on our current assessment, we do not expect significant adverse impact on account of this development. General Motors is a valued client, and we have a long-standing relationship with them. We are in constant dialogue with them to monitor and assess the situation."
However, analysts have indicated to UTVi that GM accounts for $60-70 million for Indian IT companies annually, and that they derive nearly 3% to 4% revenues from the global auto sector.
The sources also said that Chrysler and GM annually outsource $200-$300 million worth of project each to Indian IT vendors.
Analysts have also indicated that the total outsourcing pie for Indian IT companies will decline by 25%-30% because of the bankruptcy.
The auto maker has signed IT contracts valued at over $50 million with TCS and Satyam, and is among the top ten clients for TCS.
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