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Azim Premji, who cut short his education to look after the family business after the death of his father in 1966, will use a portion of the wealth accumulated in shares of his company , Wipro, to build schools, train teachers , and fund other educational activities.
Premji, chairman of India's thirdbiggest IT services exporter , will do this by transferring about 8.6% stake worth over 8,000 crore to a private trust controlled by him. The trust will then use the money to finance the educational initiatives being carried out under the ambit of the Azim Premji Foundation.
The shares, at current market prices, are worth 8,846 crore, and represent the single-largest donation by an individual towards philanthropic activities. Premji's stake in the company is expected to come down to just over 70% from 79% now.
The move comes at a time when there is greater awareness about and spotlight on the social responsibility activities of corporates and industrialists. Many industrialists such as Sunil Mittal of Bharti and Shiv Nadar of are spending money on education and the government is also stressing greater corporate involvement in social service activities.
Nadar recently donated over 580 crore by selling his 2.5% stake in HCL Technologies to fund the education initiatives of his eponymous foundation. Mittal's Bharti Foundation is running free English-medium schools for about 30,000 students in Punjab, Haryana, Rajasthan , Tamil Nadu and Uttar Pradesh.
ET was the first to report that Premji was planning to sell a small part of his stake in the country's third-largest software exporter to fund education activities , in its edition dated October 21.
The Azim Premji Foundation runs philanthropic activities and has so far been funded directly by the chairman. By transferring the shares to an irrevocable trust, the funds cannot be used for any other purpose, said Azim Premji Foundation CEO Dileep Ranjekar.
Premji was forced to leave his studies in electrical engineering at Stanford University, California, USA, at the age of 21 to take over the family business when his father MH Premji passed away suddenly in 1966. He completed his degree in 1996 after a gap of over 30 years.
