The Hindu Business Line : Arun Bajoria raises stake in Accel Frontline to 10%

Chennai, Nov 11 Mega Resources Ltd has raised his stake to 10.02 per cent in Chennai-based IT company Accel Frontline Ltd. According to the BSE announcements, Mega Resources raised its stake in Accel from 6.08 per cent on October 1, to 10.02 per cent on October 23, acquiring 8.8 lakh shares over the period.

Does the name Mega Resources ring a bell?

Go back seven years in time. In 2000, Arun Bajoria-owned Mega Resources Ltd picked up 13 per cent stake in Bombay Dyeing and caused a ripple and a run-in with SEBI—the regulator held that the purchase of shares was made without proper disclosures. In the same year, the Kolkata-based jute baron also picked up about six per cent in Ballarpur Industries.

In an interview to rediff.com at that time, Mr Bajoria had said, “investment in stocks has been a hobby of sorts with me.”

Analysts who are familiar with Mega Resources’ interest in Accel Frontline point to a number of possibilities over why the company is raising its stake. Takeover is not possible because promoters own 72 per cent of the company. (Accel Ltd, promoted by the Thiruvananthapuram -based entrepreneur, Mr N.R. Panicker, owns close to 30 per cent and Frontline Technologies Corporation of Singapore owns another 42 per cent.)

Mr Bajoria could not be contacted and Mr Panicker, the Managing Director and CEO of Accel Frontline, declined to comment.

Is Mega Resources buying into Accel on behalf of Frontline? This is the question that is doing rounds among the brokers. Relationship between the Indian and Singaporean partners has been cordial, but not chummy.

If Frontline Technologies buys the 10 per cent stake from Mega Resources, it would end up with over 51 per cent stake in the company. But it would also trigger a public offer requirement.

Accel Frontline achieved a turnover of Rs 185 crore in 2006-07 and Rs 113 crore in the first half of the current year. The company had earlier said to analysts that it expects turnover of Rs 270 crore for the current year.

On Friday, Accel Frontline’s shares closed at Rs 63.50 on the National Stock Exchange, twenty paise lower than the previous close.

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