BANGALORE: The buyback offer price of Sasken Communication
Technologies has raised eyebrows because of its steep valuation over
its current listed price. In a notice to the stock exchanges, Sasken
said, "The board has decided on buyback of the company's fully paid-up
equity of Rs 10 each from the existing owners of shares from the open
market at a price not exceeding Rs 260 per share payable in cash for
an aggregate amount not exceeding Rs 40 crore."
The buyback price represents a premium of 80% over its last closing
price of Rs 144.55 on NSE on April 17. The offer size represents 9.45%
of the aggregate of the company's paid-up equity capital and free
reserves as on March 31, 2008.
"The promoters may opine that Rs 260 per share would be the fair value
of the stock. We could see the stock price rally to about Rs 170-180
in the short-term from the current level of Rs 143-144," said Karvy
Broking vice-president Ambarish Baliga.
There have been reports that Nortel, one of its key customers and
stakeholders with 11.3% share, has terminated its existing contract
with Sasken. Company observers believe that the buyback offer may lead
to an increase in its promoter holding to 37%, which now stands at
26.44%.
There have been unconfirmed reports that Sasken might also be worried
about Nortel exiting from the company and a third party could get hold
of its stake.
Sasken's latest financial results for the fourth quarter of FY08 have
shown its revenue rising by 16% on a year-on-year (YoY) basis to touch
Rs 157.25 crore while its net profit touched Rs 14.8 crore, recording
a YoY growth of 44%.
Technologies has raised eyebrows because of its steep valuation over
its current listed price. In a notice to the stock exchanges, Sasken
said, "The board has decided on buyback of the company's fully paid-up
equity of Rs 10 each from the existing owners of shares from the open
market at a price not exceeding Rs 260 per share payable in cash for
an aggregate amount not exceeding Rs 40 crore."
The buyback price represents a premium of 80% over its last closing
price of Rs 144.55 on NSE on April 17. The offer size represents 9.45%
of the aggregate of the company's paid-up equity capital and free
reserves as on March 31, 2008.
"The promoters may opine that Rs 260 per share would be the fair value
of the stock. We could see the stock price rally to about Rs 170-180
in the short-term from the current level of Rs 143-144," said Karvy
Broking vice-president Ambarish Baliga.
There have been reports that Nortel, one of its key customers and
stakeholders with 11.3% share, has terminated its existing contract
with Sasken. Company observers believe that the buyback offer may lead
to an increase in its promoter holding to 37%, which now stands at
26.44%.
There have been unconfirmed reports that Sasken might also be worried
about Nortel exiting from the company and a third party could get hold
of its stake.
Sasken's latest financial results for the fourth quarter of FY08 have
shown its revenue rising by 16% on a year-on-year (YoY) basis to touch
Rs 157.25 crore while its net profit touched Rs 14.8 crore, recording
a YoY growth of 44%.
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