SYNOPSIS REPORT

ON
FOREIGN DIRECT INVESTMENT
IN
“WIPRO TECHNOLOGIES”

MASTER’S OF BUSINESS ADMINISTRATION

(FINANCE)

SUBMITTED BY
JAIKY SINGH
HT No. 2121-20-672-159

UNDER THE GUIDANCE OF

Dr. L. SRINIVAS REDDY
PRINCIPAL

ARISTOTLE PG COLLEGE
(Affiliated to Osmania University)
MOINABAD – HYDERABAD

1
 2020-2022

MBA II YEAR IV SEMESTERz

SYNOPSIS STRUCTURE
S.No SYNOPSIS PAGE NO

1 INTRODUCTION
2 REVIEW OF LITERATURE
RESEARCH METHODOLOGY
 NEED OF THE STUDY
 OBJECTIVE OF THE STUDY
 SCOPE OF THE STUDY
 DATA COLLECTION
 LIMITATION OF THE STUDY

3 CHAPTERIZATION

4 COMPANY PROFILE

2
 INTRODUCTION

WHAT IS INVESTMENT?
Investment is the employment of funds on assets with the aim of earning income or
capital appreciation. Present consumption is sacrificed to get a return in future. The
sacrifice that has to be born is certain but the return in the future may be uncertain.
They may get more returns on investment or they may not get.

DEFINITION
Economists use the word “investment” as a synonym for capital formation but in
every day usage the term can be use to describe the purchase of stock exchange,
securities and other financial assets as well as purchases of land, machinery and
building.

WHAT IS FOREIGN DIRECT INVESTMENT?

Foreign direct investment (FDI) is a direct investment into production or business in
a country by a company in another country, either by buying a company in the target
country or by expanding operations of an existing business in that country. Foreign
direct investment is in contrast to portfolio investment which is a passive investment
in the securities of another country such as stocks and bonds. Foreign direct
investment (FDI) is any form of investment that earns interest in enterprises which
function outside of the domestic territory of the investor. 

FDI has helped the Indian economy grow and the government continues to encourage
more investments of this sort but with $5.3 billion in FDI in 2004 India gets less than
10% of the FDI of China. Foreign direct investment (FDI) in India has played an
important role in the development of the Indian economy.
FDI in India has in a lot of ways enabled India to achieve a certain degree of financial
stability growth and development. This money has allowed India to focus on the areas
that may have needed economic attention, and address the various problems that
continue to challenge the country.

3
India has continually sought to attract FDI from the world’s major investors. In 1998
and 1999, the Indian national government announced a number of reforms designed to
encourage FDI and present a favorable scenario for investors. FDI investments are
permitted through financial collaborations, through private equity or preferential
allotments, by way of capital markets through Euro issues, and in joint ventures. FDI
is not permitted in the arms, nuclear, railway, coal & lignite or mining industries.
A number of projects have been announced in areas such as electricity generation,
distribution and transmission, as well as the development of roads and highways, with
opportunities for foreign investors. The Indian national government also provided
permission to FDIs to provide up to 100% of the financing required for the
construction of bridges and tunnels, but with a limit on foreign equity of INR 1,500
crores, approximately $352.5m.

Currently, FDI is allowed in financial services, including the growing credit card
business. These services include the non-banking financial services sector. Foreign
investors can buy up to 40% of the equity in private banks, although there is condition
that stipulates that these banks must be multilateral financial organizations. Up to 45%
of the shares of companies in the global mobile personal communication by satellite
services (GMPCSS) sector can also be purchased.

By 2004, India received $5.3 billion in FDI, big growth compared to previous years,
but less than 10% of the $60.6 billion that flowed into China. Why does India, with a
stable democracy and a smoother approval process, lag so far behind China in FDI
amounts?

Although the Chinese approval process is complex, it includes both national and
regional approval in the same process. Federal democracy is perversely an
impediment for India. Local authorities are not part of the approvals process and have
their own rights, and this often leads to projects getting bogged down in red tape and
bureaucracy. India actually receives less than half the FDI that the federal government
approves.

4
 REVIEW OF LITERATURE

Investment is the employment of funds on assets with the aim of earning income or
capital appreciation. Present consumption is sacrificed to get a return in future. The
sacrifice that has to be born is certain but the Return in the future may be uncertain.
They may get more returns on investment or they may not get.

Economists use the word “investment” as a synonym for capital formation but in
every day usage the term can be use to describe the purchase of stock exchange,
securities and other financial assets as well as purchases of land, machinery and
building.

Foreign direct investment (FDI) is a direct investment into production or business in

a country by a company in another country, either by buying a company in the target
country or by expanding operations of an existing business in that country. Foreign
direct investment is in contrast to portfolio investment which is a passive investment
in the securities of another country such as stocks and bonds. Foreign direct
investment (FDI) is any form of investment that earns interest in enterprises which
function outside of the domestic territory of the investor. 

FDI has helped the Indian economy grow, and the government continues to encourage
more investments of this sort – but with $5.3 billion in FDI in 2004 India gets less
than 10% of the FDI of China. Foreign direct investment (FDI) in India has played an
important role in the development of the Indian economy. FDI in India has – in a lot
of ways enabled India to achieve a certain degree of financial stability, growth and
development. This money has allowed India to focus on the areas that may have
needed economic attention, and address the various problems that continue to
challenge the country.

India has continually sought to attract FDI from the world’s major investors. In 1998
and 1999, the Indian national government announced a number of reforms designed to
encourage FDI and present a favorable scenario for investors. FDI investments are

5
permitted through financial collaborations, through private equity or preferential
allotments, by way of capital markets through Euro issues, and in joint ventures. FDI
is not permitted in the arms, nuclear, railway, coal & lignite or mining industries.

A number of projects have been announced in areas such as electricity generation,

distribution and transmission, as well as the development of roads and highways, with
opportunities for foreign investors. The Indian national government also provided
permission to FDIs to provide up to 100% of the financing required for the
construction of bridges and tunnels, but with a limit on foreign equity of INR 1,500
crores, approximately $352.5m.

Currently, FDI is allowed in financial services, including the growing credit card
business. These services include the non-banking financial services sector. Foreign
investors can buy up to 40% of the equity in private banks, although there is condition
that stipulates that these banks must be multilateral financial organizations. Up to 45%
of the shares of companies in the global mobile personal communication by satellite
services (GMPCSS) sector can also be purchased.

By 2004, India received $5.3 billion in FDI, big growth compared to previous years,
but less than 10% of the $60.6 billion that flowed into China. Why does India, with a
stable democracy and a smoother approval process, lag so far behind China in FDI
amounts?
Although the Chinese approval process is complex, it includes both national and
regional approval in the same process. Federal democracy is perversely an
impediment for India. Local authorities are not part of the approvals process and have
their own rights, and this often leads to projects getting bogged down in red tape and
bureaucracy. India actually receives less than half the FDI that the federal government
approves.

6
 RESEARCH METHODOLOGY

NEED FOR THE STUDY:

It is commonly known that capital flows in developing economies like India have

risen sharply and has, therefore become a self-propelling and dynamic factor in the

accelerated growth of economies. The impassioned advocacy of increased FDI flows

is based on the well-worn arguments that FDI is a rich source of technology and know

how; it can stimulate the labor oriented export industries of India, promote

technological change in the industries and put India on a higher growth path. The

excitement of FDI needs to be based on analytical review of India’s needs,

requirements and potential to participate in huge investment flows.

The practical literature on the relationship between FDI and development is mixed.

Despite a number of studies and seeming contradictions, two consistent issues that

repeatedly arise are:

● What are the motivations for FDI flows into India?

● What are the economic and social implications of FDI flows in India?

A detailed study of FDI in India requires an examination of the determinants and the

impact of FDI on Indian Economy. Studying FDI flows will help to assess the nature

and the true extent to which the Indian Economy has globalized.

7
 OBJECTIVE OF THE STUDY:

Keeping in view the importance of FDI in the development of economies and the
dynamic nature of the topic, the present study focuses on the following objectives.
The primary objective of this study is to review why India has been a preferred
destination for FDI and study the impact of FDI on the Indian economy.
The sub objectives of the study are
 To review the major reasons for attracting FDI;
 To analyze the investment strategies in selecting the right investment projects;
 To study if the FDI investments have contributed to the positive growth in the
standard of living;
To study the impact of FDI investments on the culture of the country.

8
 SCOPE OF THE STUDY:

(i) Review of policy on cases requiring prior Government approval for foreign
investment: As of today, only proposals involving total foreign equity inflows of more
than Rs.1200 crores (as against the earlier limit of the total project cost being more
than Rs.600 crores), now require to be placed for consideration of CCEA.
(ii) Further, a number of categories of cases, where prior approval of FIPB/CCEA for
making the initial foreign investment had been taken, have been exempted from the
requirement of approaching FIPB/CCEA for fresh approval. This has resulted in
saving of considerable time and efforts for FIPB/CCEA and also in expediting foreign
investment inflows;
(iii) Introduction of a specific provision for 'downstream investment through internal
accruals': This will ensure that Indian companies have full freedom in accessing their
internal resources for funding their downstream investments;

9
RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
PRIMARY
Methodology adopted for making this project has been on a tedious pattern, much of the data
collected was synchronized and conceptualized in order of the understanding wherein all the
possible data was arranged in PRIMARY Data.

SECONDARY
Data is collected through secondary sources like research reports and websites. The required
data have been collected from various sources i.e. World Investment Reports, Asian
Development Bank’s Reports, various Bulletins of Reserve Bank of India, publications from
Ministry of Commerce, Govt. of India, Economic and Social Survey of Asia and the Pacific,
United Nations, Asian Development Outlook, Country Reports on Economic Policy and
Trade Practice- Bureau of Economic and Business Affairs, U.S. Department of State and
from websites of World Bank, IMF, WTO, RBI, UNCTAD, EXIM Bank etc.

10
LIMITATION
Foreign direct investment is not free from limitations. Developing countries
like India has very little choice when it comes to opening the different sectors of the
economy to foreign investment. A case in point is the opening up of the consumer
non-durable industry to foreign investment.
 Eg :- The advent of Pepsi and Coke saw the exit of domestic soft drink manufactures
and the emergence of a duopoly. Similarly, the experience with regard to FDI in the
power sector has been far from desirable. The governments of developing countries
must be able to channelize FDI in the most desirable areas of investment and the
government policy towards FDI should be stable over the long run

11
 COMPANY PROFILE

Wipro Ltd., the flagship company of the Azim H Premji group was incorporated in the year
1945. The company started off originally as a manufacturer of vegetable ghee/vanaspati,
refined edible oils etc. Gradually the company has diversified into various other businesses.

Today Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services
Company globally. Wipro provides comprehensive IT solutions and services, including
systems integration, Information Systems outsourcing, package implementation, software
application development and maintenance, and research and development services to
corporations globally.

In the Indian market, Wipro is a leader in providing IT solutions and services for the
corporate segment in India offering system integration, network integration, software
solutions and IT services. Wipro also has profitable presence in niche market segments of
consumer products and lighting. In the Asia Pacific and Middle East markets, Wipro provides
IT solutions and services for global corporations.

Wipro's ADSs are listed on the New York Stock Exchange, and its equity shares are listed in
India on the Stock Exchange – Mumbai, and the National Stock Exchange, among others.

Wipro is the leading strategic IT partner for companies across India, the Middle East and
Asia–Pacific – offering integrated IT solutions. They plan, deploy, sustain and maintain your
IT lifecycle through their total outsourcing, consulting services, business solutions and
professional services. Wipro InfoTech helps you drive momentum in your organisation – no
matter what domain you are in.

Backed by their strong quality processes and rich experience managing global clients across
various business verticals, they align IT strategies to your business goals. Along with their
best of breed technology partners, Wipro InfoTech also helps you with your hardware and IT
infrastructure needs.

12
The various accreditations that they have achieved for every service they offer reflect their
commitment towards quality assurance. Wipro InfoTech was the first global software
company to achieve Level 5 SEI–CMM, the world's first IT Company to achieve Six Sigma,
as well as the world's first company to attain Level 5 PCMM.

Their continuing success in executing projects is a result of their stringent implementation of

quality processes. Deploying quality frameworks to align with your business will give you
the benefit of a smooth and transparent transition while providing complete IT lifecycle
management. Reliability and perfection are a result of their adherence to these quality
benchmarks and this has been their key differentiator, while helping drive the business
momentum.

The company’s experience and expertise are measured against globally recognized standards
to ensure their commitment in delivering competitive solutions to their customers. Wipro
InfoTech epitomises quality by maintaining high standards in service offerings and products,
as well as internal processes and people management. They believe in constantly scaling
quality standards by expanding our efficiency in all areas beyond their basic IT offerings.

Different people perceive innovation in various ways. At Wipro InfoTech, their innovative
thinking helps them adopt newer business lines and offerings based on your business
expectations. They have adapted to the changes brought about by technology and business
and this has helped us improve customer experience through service delivery and process
optimisation.

In 2013, the company decided to shut down its hardware manufacturing business because it
offers no competitive advantage. It would no longer build Wipro–branded desktops, laptops,
and servers, including the SuperGenuis line of PCs and NetPower servers. It would now look
to beef up its footprint as a systems integrator and increase its focus on IT services. 

13
 DATA ANALYSIS AND INTERPRETATION

Q1. What is total FDI inflow in India

Year Wise FDI Inflows In India Through FIPB Route/ RBI’s Automatic Route/ Acquisition
Route
Table 1: FDI Inflows In India From 2000-2012

Financial Year Capital Inflow (US$ %age Growth Over

Million) Previous Year

2004 – 2005 2,463 -

2005 – 2006 4,065 67%

2006 – 2007 2,705 (34%)

2007 – 2008 2,188 (15%)

2008 – 2009
3,219 48%
2009 – 2010
5,540 70%

2010 – 2011 12,492 181%

2011 – 2012 24,575 58%

2012 - 2013
31,396 11%
2013 - 2014
25,834 (6%)

2014 - 2015 19,427 (25%)

2015 - 2016 28,403 24%

Total 162,307 -
Source: Nic.in

14
Interpretation
For the financial year (FY) 2010-2011 (April 2010 - March 2011), India's FDI inflow
amounted to US$19.4 billion, down 25% from US$25.6 billion of the FY2009-2010. The
inflow for the FY2010-2011 was mainly from Mauritius (US$6.9 billion, 36% of total),
mainly because most of the investors want to take advantage of the double taxation avoidance
agreement between Mauritius and India, and Mauritius-based investors do not have to pay
capital gains tax in India. Singapore is the second largest contributor of FDI, after Mauritius,
with US$1.7 billion, representing 9% of the total inflows. Japan came third with US$1.6
billion, representing 8%, followed by the Netherlands and the USA with 6% each, and
Cyprus with 4.5% of total FDI inflows. During the period, the services sector attracted the
highest FDI inflow (US$3.4 billion), followed by telecommunications with US$1.7 billion
and automobile with US$1.3 billion.

15
 FINDINGS

India is established as one of the top tier world destinations for FDI. In the Asia-Pacific region,
the country consolidated its second top position, besides China, after a lull in 2009 because of
financial crisis. To augment, India’s inward investment rule went through a series of changes
since economic reforms were evolved in two decades back. The cumulative amount of FDI
inflows into India were US$1,97,935 million for the period April 2000 – April 2011, including
data of‘re-invested earnings’ & ‘other capital’ of equity inflows. These are the estimates on an
average basis, based upon data for the previous two years, published by RBI in Monthly Bulletin.
The cumulative amount of Indian FDI inflows, excluding, amount remitted through RBI’s-NRI
Schemes, were US$1,35,958 mi for the period April 2000 – April 2011.
As per the recent survey done by the United National Conference on Trade and Development,
India will emerge as the third largest recipient of FDI for the three-year period ending 2012. As
per the study, the sectors which attract highest FDI were services, telecommunications,
construction activities, and computer software and hardware.
There has been a continuing and sustained effort to make the FDI policy more liberal and
investor-friendly. Significant rationalization and simplification of the policy has, therefore, been
carried out in the recent past. DIPP, in its consultation paper titled ‘FDI Policy—rational and
relevance of caps’ has, as a landmark initiative, accepted that up to 49% foreign investment is
indirectly possible in all sectors. This effectively means that an Indian owned and controlled
company can make downstream investments even in prohibited sectors such as multiband retail
trading etc. It is important here to note that foreign investment for this purpose includes not only
strategic foreign investment but also FII under portfolio investment schemes, NRI, GDR, ADR
etc.\

16
 CONCLUSION

Amidst today’s time of fierce competition and a quest to achieve and enhance a substantial
level of economic and social development; each and every nation is trying to liberalize its
economic policies in order to attract investments from not only, domestic players, but also
from magnates all across the globe. Consequently, people with generous reserves of funds, all
around the globe, are expanding their wings and seeking opportunities for investing in
different spheres of this lucrative market. India too is not oblivious to the rapid developments
taking place in the global market and has emerged as one of the prime destinations for the
investment of funds from an impressive number of foreign investors. FDI is a superb conduit
for the transfer of technology and know-how to developing countries. This message has not
been lost on India's policy makers. They have though until the decade of the nineties
attempted to regulate and control its spheres of activity and the contractual forms of foreign
enterprise participation in the economy. The framework of policies they put in place was
guided by the desire to limit foreign control of economic activity but at the same time take
advantage of the technology and knowhow provided by foreign capital. This attempt at riding
two horses in tandem, a complex feat, inevitably resulted in a complex and cumbersome
bureaucratically guided FDI regime and earned India the reputation for hostility towards FDI.
The GDP growth in India is anticipated to surpass 8% yearly and the number of people in the
Indian middle class is set to triple over the next 15 years, the domestic demand is expected to
grow exponentially. India’s young demographic profile also helps it in providing an
increasingly well-educated and cost-competitive labor force. These factors put India in a
good position to attract an increasing proportion of global FDI going forward.

17
 SUGGESTIONS

 India is building up the reforms, but admits that inter-governmental politics have been
impacting government policy.
 FDI is lowering inflation and is increasing GDP growth of the economy.
 The GDP growth of the country grew 7.8% in the first quarter of 2011 (Q4 of FY11),
down from 8.4% in Q4, FY10, and 8.9% in Q3, FY10.
 India's diverse economy encompasses traditional village farming, modern agriculture,
handicrafts, a wide range of modern industries, and a multitude of services.
 Services are the major source of economic growth, accounting for more than half of
India's output with less than one third of its labor force.
 The purchasing power parity (PPP) of India is on an increasing trend because of FDI.
In terms of PPP, Indian economy valued is at US$3.92 trillion and was at the fourth
place in 2010.
 The country was behind the US, China and Japan, according to the World Bank.
 The Indian economy is expected to be nearly US$85.97 trillion on PPP basis by 2050
from US$3.92 trillion in 2010.
India is expected to be the world’s largest economy by 2050, surpassing China and the US, in
view of its continuing robust growth in the recent past

18
 BIBLIOGRAPHY
Books
1. Investment management
i. Prakash Guptha, IV edition, 2005
V.K.Bhalla
2. Security Analysis And Portfolio Management
i. Sulthan Chand and son’s, II edition, 2002
V.A.Avadhani
3. Investment management
i. Sulthan Chand and son’s, V edition, 2004
Preethi Singh
4. Baskaran A (2010), “The Impact of Foreign Direct Investment on Indian Economy”,
Excel Books.
5. Direct Tax Laws (2010), “Guide To Foreign Direct Investments In India With FDI
Policy Issued on 1st April 2010”, Taxmann Publications Pvt. Ltd.
6. G. Gopala Krishna Murthy (2007), “Foreign Institutional Investors – Indian and
Global Scenario”, Icfai University Press, Hyderabad

WEB SITES
o www.rbi.com
o www.fdiintelligence.com
o www.sebi.gov.in.com

19