3i Infotech shares continue rally on propective deal with Bengaluru-based firm
But, of late, its shares have been rising despite the company reporting a net loss Rs 396 crore for the quarter ended March this year.
By Palak Shah, ET Bureau | Updated:
MYMBAI: Shares of Bengaluru-based 3i Infotech have been consistently hitting the upper circuit on NSE and BSE for nearly two weeks now on talks that a large Bengaluru-based IT company may acquire a stake in it. The IT firm's shares had crashed in May -hit a life-time low of Rs 2.18 on May 25 after ICICI Bank sold its shares heavily in the market. But, of late, its shares have been rising despite the company reporting a net loss Rs 396 crore for the quarter ended March this year, compared with Rs 299 crore in the corresponding quarter last year.
"Deal talks with regard to 3i Infotech have been in the market for some time now," said some time now," said Anil Singhvi, chairman, Ican Investment Advisors. "The company is mainly in volved with clients in the banking and financial sectors, so a buyer with similar products in IT space may show interest if the debt issue is addressed appropriately." ICICI Bank, however, did not respond to an email query from ET on the negotiations of the deal.
ICICI Bank had started 3i Infotech in the 1990s, and held over Rs 600 crore in debt in the mid-cap IT firm, besides a 6.47 per cent stake in it as on March quarter. A source close to ICICI Bank said that it has written off the entire debt of 3i Infotech and classified it as an non performing asset.
However, ICICI Bank may retain its right to recover its loan when the conditions were more conducive.Other banks have debt of close to Rs 1,100 crore in 3i Infotech. The Bengaluru-based company is apparently negotiating the terms of debt re-structuring with other banks, said people familiar with the developments. The negotiations were based on the lines that the IT firm may bring in fresh capital of Rs 200 crore in 3i Infotech. Of the Rs 1,100 crore debt, Rs 400 crore will remain on the balance sheet of 3i Infotech, which it can service, said people in the know of things. The rest of the debt may get converted into equity by banks. 3i Infotech's market capitalisation stood at Rs 267 crore.
"Deal talks with regard to 3i Infotech have been in the market for some time now," said some time now," said Anil Singhvi, chairman, Ican Investment Advisors. "The company is mainly in volved with clients in the banking and financial sectors, so a buyer with similar products in IT space may show interest if the debt issue is addressed appropriately." ICICI Bank, however, did not respond to an email query from ET on the negotiations of the deal.
ICICI Bank had started 3i Infotech in the 1990s, and held over Rs 600 crore in debt in the mid-cap IT firm, besides a 6.47 per cent stake in it as on March quarter. A source close to ICICI Bank said that it has written off the entire debt of 3i Infotech and classified it as an non performing asset.
However, ICICI Bank may retain its right to recover its loan when the conditions were more conducive.Other banks have debt of close to Rs 1,100 crore in 3i Infotech. The Bengaluru-based company is apparently negotiating the terms of debt re-structuring with other banks, said people familiar with the developments. The negotiations were based on the lines that the IT firm may bring in fresh capital of Rs 200 crore in 3i Infotech. Of the Rs 1,100 crore debt, Rs 400 crore will remain on the balance sheet of 3i Infotech, which it can service, said people in the know of things. The rest of the debt may get converted into equity by banks. 3i Infotech's market capitalisation stood at Rs 267 crore.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
