Azim Premji, India’s third richest man and chairman of Wipro, India’s third largest software services company, has said he will transfer 213 million equity shares, or about 8.6 percent of his stake, valued at 88.46 billion rupees ($2 billion), to a private trust controlled by him.

The transfer of money to Azim Premji Trustee Co Pvt Ltd will be effective December 7 and used to fund educational initiatives carried out under the aegis of the Azim Premji Foundation, including setting up the Azim Premji University in Bangalore.

This share transfer represents the single-largest individual donation towards philanthropic activities.

The trust will utilize the endowment to fund various social, not-for-profit initiatives which are expected to scale significantly over the next few years.

Currently, Wipro’s shares are held by certain private companies controlled by Premji. The voting rights of these shares will remain with Premji, even though his stake in the company will come down as a result of the donation.

Karnataka government has recently approved the formation of the Azim Premji University under a special legislative act. The university, to be located in Bangalore, will be operational by 2011, a foundation statement said.

The university will offer programs and conduct research in the field of education and other closely related fields of development. The university will essentially offer a range of programs to teach teachers on subjects including education policy, teaching and learning, education psychology, educational leadership & management, education technology, education research and development studies.

The purpose of these programs will be to catalyze and support improvement in education, especially in the backward regions of the country, the statement said.

“We believe that good education is crucial to building a just, equitable, humane and sustainable society. We want to contribute significantly towards improvement of education in India, and through that towards building a better society. All our efforts, including the University that we are setting up, are focused on the underprivileged and disadvantaged sections of our society. Our experience of the past 10 years has motivated us to significantly scale up our initiatives, across multiple relevant dimensions,” said Premji in the statement.

Since its inception in 2001, the Azim Premji Foundation has worked largely in rural India, often in close partnership with various state governments, to help contribute to the improvement of quality of education. Its programmes have touched over 25,000 schools and over 2.5 million children over the years.

“We have covered about 75-90 districts across the country overall. But we’ve gone really deep —- as in engaging with every school, every teacher in a district in only 6 districts. This figure will rise to 50 in the next five years, ” said Anurag Behar, co-CEO of Azim Premji Foundation in a statement.

The purpose of creating the endowment is to financially support the activities, the statement said.

Azim Premji cut short his education to look after the family business after the death of his father in 1966. 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. However, he completed his degree in 1996 after a gap of over 30 years.

Well-known Indian industrialists like Sunil Mittal of Bharti and Shiv Nadar of HCL Technologies are spending money on education. Recently, Nadar donated over 5.8 billion rupees ($128.1 million) by selling his 2.5 percent stake in HCL Technologies to fund the education initiatives of his foundation.

Mittal’s Bharti Foundation is running free English-medium schools for about 30,000 students in the Indian states of Punjab, Haryana, Rajasthan, Tamil Nadu and Uttar Pradesh.

Anand Mahindra of Mahindra & Mahinda donated $10 million to the Humanities Centre at Harvard University while the Tata group gave away $50 million to Harvard Business School to fund a new academic and residential building on its campus. Anil Agarwal Foundation of Vedanta announced an endowment of $1 billion in July 2006 to set up Vedanta University in Orissa.

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