Ramco Systems staff enjoy stock’s bull party

The stock price of Chennai-based Ramco Systems has soared so much in the last one year that it has helped the company retain some of its employees, said its CEO Virender Aggarwal.

On Tuesday, the stock price closed at ₹647.75, up by ₹27.75. This is nearly four times the price at which it traded a year back. Similarly, the daily volume in the scrip averaging at over 10 lakh in the past three months, is sharply up from around 1.87 lakh a year ago.

In the last one year, the company’s market capital burgeoned nearly three times to ₹1,581.87 crore, according to data available with the BSE.

According to a stock exchange disclosure, some staff received shares even at ₹10 (2,500 shares) and some at ₹340 (25,000 shares) under the ESOS 2013 scheme, giving them whopping returns on their allotments.

However, some staff members were allotted shares without any discount at ₹679 (27,500 shares), under the scheme. The vesting period for the option is three years.

“I don’t know the reason for the surge in stock price. But, employees are happy, and I guess people investing in our stock have high hopes on us. They think we will do something different. The higher stock price has helped us to retain people as those holding ESOPs think a lot of positive things are happening,” Aggarwal told BusinessLine .

During the January-March period, holdings of foreign institutional investors increased to 5.17 per cent (4.64 per cent).

“Employee attrition is very low at 2-3 per cent. We used to lose four to five people a week a year ago. Now, we lose one to two a week. While it is a good thing, the entire headcount planning was not done based on such low numbers,” he said.

The company allotted 5.28 lakh ESOP shares in 2014-15 to employees based on grades, he said.

When asked whether employees joining the company are given shares, a company official said it depends on what is contained in the offer letter. “If it is yes, the shares will be granted immediately. However, this is subject to the convening of the compensation committee.”

Sources said that Ramco Systems has become a product-centric company from a software services provider. This has helped the company turn around in the last one year through greater focus on profitability, research and development.

Meanwhile, on April 29 the company’s Fund Raising Committee allotted 51.18 lakh equity shares of ₹10 each to qualified institutional buyers at a price of ₹635 an equity share. This is at a discount of 4.94 per cent on the floor price of ₹668.03 aggregating to ₹ 324 crore.

Consequent to this, the paid-up equity share capital has increased to 2.95 crore equity shares of ₹10 each, from 2.44 crore equity shares of ₹10 each.

Aggarwal said the funds from the QIP will be used to clear the interest burden, which is nearly ₹10 crore a quarter, and launch products in the US that will require lot of money for sales and marketing.

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