Market Rumors

MphasiS shares rose 4.4% to close at Rs 581.05 on Friday on renewed speculation the company may be merged with parent HP India. MphasiS has consistently denied this talk or declined to comment on the matter in the past. Any such move would result in the parent announcing an open offer to buy the shares of minority shareholders. The talk comes at a time when broking firm CLSA launched a scathing attack on the proposed semi-annual price cuts at MphasiS. In a note named “Digital Globalsoft revisited?”, the broking firm, while rating the stock a sell, said, “The proposed semi-annual price cuts at MphasiS and a move away from a cost-plus model by HP is a classic case of an MNC steam-rolling its interests over minority shareholders.”

Analysts tracking the stock say the move could hurt MphasiS’ margins, and in turn, its stock price. The stock is already down 30% from its 52-week high of Rs 795 last November, and most analysts are bearish on the stock. “Concerns around a value-dilutive merger with HP India have merit, given similar experience with Digital in 2003,” the CLSA report added. But investors appear to have picked up only what they like from the report. While the report has strengthened the hopes of the company’s merger with HP, MphasiS shareholders are betting on a generous offer from HP this time around.


Reliance Infrastructure:IT may not be the best of times to trade, but it may not be a bad time either to invest. After having kept a low profile for the past few months, the Rar(e)ing Bull is said to be selectively making purchases. He is learnt to be accumulating shares of Reliance Infrastructure in the past couple of sessions. On Friday, the stock closed at Rs 1,112.75, down marginally over the previous close. On the BSE, 4.31 lakh shares changed hands, slightly more than the two-week average daily volume of 4.26 lakh shares. Talk is that he is a buyer in Rallis India and Cairn Energy as well. On Friday, Rallis shares rose 3% to close at Rs 1,049.45 and Cairn India rose 1.3% to Rs 301.05.

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