Satyam's ESOP moves spark buying
Rajiv Nagpal
NEW DELHI 4 FEBRUARY
SATYAM'S attempt to retain its talent pool by preparing for stock options to employees today sparked off a frenzy in the market. The market interpreted it as a move to bring in fresh FII stake into the company, and behaved just as it would in such situations go into a buying overdrive.
The spark was a release issued yesterday by the government listing FIPB clearances, including one application by Satyam for raising its FDI limit to 40 per cent. The news reached the Calcutta kerb - the only active kerb market now - in the evening."Psst, have you heard..." and the Satyam counter was humming.
There was frantic buying. The Satyam Computer Services scrip gained Rs 180 from its official close of Rs 2,870, and the scrip was quoting at Rs 3,050 at around 11.00 p.m. "Some major announcement is expected tommorow and the scrip will touch Rs 4,000, upper circuits would not open for the next few days," said a leading kerb dealer. A TV business channel too reported that the FDI investment limit in the company had been raised to 40 per cent.
Early morning kerb trades saw the scrip gain another Rs 20 to touch Rs 3,070 which is just Rs 30 below where it would have hit the circuit breaker for the day. The market opened on a bullish note due to the Nasdaq effect.
However, the frenzy was short-lived. There were reports that the company had denied that it had sought any such approval from the government. The stock tumbled to Rs 2,970 with frantic selling. By now confusion reigned supreme ? some believed the denial reports, while a small section maintained "something positive" had happened in the company.
The company then clarified that it had applied to increase NRI stake in the company, and not FII stake, which is also FDI money. On its part, the market interpreted FDI as fresh FII investment in the company.
It is learnt that the company's application, cleared by FIPB, was for increasing its NRI stake, currently at 1.9 per cent, to 10 per cent by issuing new equity directly or through instruments like warrants, fully convertible debentures and partly convertible debentures.
These instruments would be issued under ESOP to help the company retain it talent pool. |
