Educomp provides decent trading opportunity: Mehraboon Irani

MUMBAI - Shares of Educomp Solutions surged higher after the company tied up $155 million to repay FCCBs of $78.5 million on due date. Out of the $155 million, $70 million was raised via ECB under 8.5 years facility.

The company raised $30 million under external commercial borrowings from IFC and remaining $40 million from Societe De Promotion. It will raise $50 million at Rs149.16/sh via preferential allotment of shares to IFC, Proparco & Mount Kellett. The company will also issue preferential allotment of shares & warrants to promoter group upto $55 million at Rs 193.74/share, a premium of 44 percent to yesterday’s closing price.

The company will utilise $111 million for existing FCCB redemption and $44 million towards capex & strengthening balance sheet.

“Educomp has been hammered down recently for various reasons. The fund raising news is a positive for the stock and gives decent trading opportunity. Fundamentally there are still issues and they must be addressed first.

The fundamentals of the company won’t change overnight but this development will provide breather for the company,” said Mehraboon Irani, Principal & Head- Pvt. Client Group Business, Nirmal Bang Securities.

At 12:15 p.m., the stock was at Rs 149.60, up 9.16 percent on the BSE. It touched a high of Rs 152.70 and a low of Rs 138.50 in trade so far.