High premium in Sasken buyback raises eyebrows
The buyback offer price of Sasken Communication Technologies has raised eyebrows because of its steep valuation over its current listed price.
By TNN |
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%.
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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