MindTree says will seal buyout deal this fiscal

MindTree Consulting Ltd is actively scouting for acquisitions in the telecom and home appliances space, and is likely to finalise a deal before the end of this fiscal.The Bangalore-based IT consulting firm, which raised Rs 200-odd crore early this year through an IPO, is looking to grow inorganically to enhance its delivery capacity in niche areas.

“At any given point in time, we are evaluating 2-3 targets. We will surely be making an acquisition during this fiscal. It will be a niche company to fill up gap in our current offerings. The buyout will be done to enhance our delivery capacity and not to expand our market,” said S Janakiraman, president and CEO, research and development services, MindTree Consulting Ltd.

Janakiraman said the size of the deal would be anywhere between $5 million and $10 million, and could even be bigger if it fulfils the requirement of the company.And since the acquisition will be driven by the intent to improve delivery capacity, Janakiraman said it would either be in India or any other low-cost country.

Read more in The DNA Money article.

M-cap inches close to $1 trn

The market capitalisation of India is inching towards $1 trillion after the total value of all listed stocks touched an all-time high of Rs 39,78,172 crore or about $970.28 billion (at Rs 41 a dollar) on Wednesday. The economy touched the $1 trillion mark just recently.

The journey towards the $1-trillion mark is nothing less than spectacular, considering that the market cap was just about $150 billion in 2004. To put in context, the total bank deposits in 2004 was $500 billion and has crawled to about $650-700 billion in the same period.

A total of 33 new scrips, including Idea Cellular (Rs 30,372 crore), Power Finance Corp (Rs 15,602 crore), Indian Bank (Rs 5,406.51 crore), Firstsource Solutions (Rs 3,913.32 crore), MindTree Consulting (Rs 2,973.38 crore), Fortis Healthcare (Rs 2217.97 crore), Global Broadcast News (Rs 1,855.46 crore), Redington India (Rs 1,378.69 crore) and ICRA (Rs 926.05 crore) added as much as Rs 70,710 crore to the market cap. One of the prominent gainers in the m-cap journey is Reliance Capital, whose m-cap crossed the $ 5 billion-mark on Wednesday.

Read more in The Business Standard article.

Small IPOs to face price band on listing

The Securities and Exchange Board of India (Sebi) proposes to ask the stock exchanges to put circuit filters on the first day of listing of those companies with issue sizes up to Rs 200 crore. A formal communication to this effect is expected shortly.

After the first day of listing, the exchanges put a price band of 20 per cent for the movement of the stock prices. However, the level of circuit filter proposed for IPOs on the first day of listing is not known.

The decision follows the recent Sebi investigation into the huge surge in equity prices of six companies on listing day. The market regulator has also observed that certain entities placed abnormally large share orders at prices far below the prevailing market rates on the opening day.

The market regulator concluded that the intention of placing such orders was not for genuine trading but only for artificial enhancement of demand, a manipulative practice. The securities under the regulator’s scan now are Mindtree, Shree Asthavinayak, Pyramid Saimira, Pochiraju, Cambridge and Al Champdany.

Abnormal price rallies have also been observed when shares are relisted. Several companies that delisted from regional exchanges to list on the national exchanges have seen a 900-1,000 per cent increase in their shares on listing day.For example, Delhi-based Ahluwalia Constructions saw a 1,000 per cent rise in its scrip prices when it relisted on the Bombay Stock Exchange on February 22 this year.