Stocks

HCL Info jumps 20% on talk of Lenovo buying stake

Our Bureau New Delhi | Updated on November 16, 2017 Published on August 28, 2012

blHCLInfoCo.eps

Both firms brush it aside as rumour

HCL Infosystems' stock price on the BSE was up 20 per cent on Tuesday as a response to rumours of Lenovo buying the company promoter’s 51 per cent stake at around Rs 500 crore.

The company’s stock price closed at at Rs 43.80 from previous close of Rs 36.35. The current market capitalisation is Rs 976 crore.

Both companies declined to comment on this development saying, “We do not comment on market rumours and speculation.”

“In compliance with corporate governance practices, HCL Infosystems informs the stock exchanges regarding any material price sensitive information,” HCL Infosystems said. “We are not aware of any such development about promoter intending to sell stake in the company and as a company policy we do not comment on market speculation,” it added.

‘Open for mergers’

In a recent interview to Business Line, Rahul Agarwal, Executive Director — Commercial Business, Lenovo India, said the company keeps its eyes ‘open for mergers and acquisitions at all levels’ whether in India or globally.

The 100 per cent subsidiary of Chinese company, Lenovo India, is a part of Electronics Corporation of Tamil Nadu (ELCOT), one of the largest projects in India to distribute free laptops to students.

“In education, from 10 per cent market share two years ago, we are now 20 per cent plus. The Government’s business keeps fluctuating, but last year we had a 17 per cent market share from 10 per cent a year ago,” Rahul Agarwal had said.

Analysts say if the company decides to buy the factory of HCL Infosystems, it would make Lenovo’s supply chain process more efficient and improve the delivery time

“It would help them in becoming more competitive from pricing stand point given the supply chain efficiencies that they would gain and provide breadth to fulfil future orders more swiftly,” Vishal Tripathi, Principal Research Analyst, Gartner, said.

On a consolidated basis, HCL Infosystems' net profit dropped 82.6 per cent to Rs 2 crore on 3.4 per cent rise in net sales to Rs 2,704.48 crore in June quarter of current year over Q4 June 2011.

The small-cap IT company has an equity capital of Rs 44.58 crore. Face value is Rs 2/share.



>ronendrasingh.s@thehindu.co.in

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on August 28, 2012
null
This article is closed for comments.
Please Email the Editor