BANGALORE: The stocks of both Wipro and Infosys plunged on after Nortel Networks Corp, North America’s biggest maker of telephone equipment, filed for bankruptcy protection on Wednesday.
The Wipro stock was down by almost 7 per cent to Rs 228.20 in intra-day trading on Thursday.
The company whose UK arm is a sponsor of London’s 2012 Olympics, filed for bankruptcy protection the day before it was make an interest payment of around $ 107 million.
Nortel said the process would allow it to deal with its debt burden and restructure operations. It expects normal day-today operations to continue without interruption.
However, Manish Dugar, CFO, Wipro Technologies said, “Nortel accounts for less than 1.5 per cent of Wipro’s IT business revenue and our assessment is that a substantial portion is expected to continue. The outstanding amount subject to arbitration is $ 15 million.” “Wipro is also a partner of Nortel for systems integration work in Asia and India, and we expect no impact to our clients,” he said.
“Nortel 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,” Manish Dugar added.
Currently, Wipro has almost $ 25 million in revenue from Nortel every year.
V Balakrishnan, the Chief Financial Officer of Infosys, says that the Nortel bankruptcy filing will not have any material impact on the company.
Balakrishnan said Infosys has an outstanding of nearly $ 4 million from Nortel.
Nortel accounts for about 0.5 per cent of Infosys revenues, and about 300-400 staff of the Indian company is engaged in Nortel projects.
HCL Technologies said it has no existing commercial relationship with Nortel and had an ‘insignificant’ relationship with the company in the past.
