Satyam bonus on April 13; 1 to 2 ratio expected -Rumor KPMG & Intel show interest.
Our Market Bureau
Mumbai, March 30: Satyam Computers has finally put to rest
the speculation of a bonus from the company. However,
speculators have now shifted their focus on the ratio in which
the company will capitalise its reserves to reward its
shareholders. The market firmly believes that the bonus is
unlikely to exceed a ratio of 1:2 or in other words, one share
for every two shares held. The company's board will meet on
April 13 to consider a bonus issue, accounts and dividend.
While the news of the meeting saw the stock hitting the upper
circuit of the price band on BSE at Rs 1,502, the stock
continued to be traded in the band of Rs 1,418 to Rs 1,500
till 2.45 pm on the NSE. However, during the last phase of
the trading session, the stock hit the circuit filter at Rs
1,519.60. On the BSE, the stock registered a volume of only
1.25 lakh shares which, in recent times, is one of the lowest,
with the pending buy orders pegged at over 3.7 lakh shares.
However, on the NSE, the counter clocked a volume of
25.96 lakh shareswith an outstanding buy order of 36,000
shares.
On the CSE, the stock was locked at Rs 1,584. Bonus
rumours have been doing the rounds ever since the
company's scrip crossed the Rs 1000 mark in early March.
The company's intimation to the stock exchanges about its
board meeting to consider a bonus issue caught the bear
operators unawares, since they expected the company to
either declare a dividend or a bonus.
A section of the market believes that since the company is
likely to reward the investors with a handsome dividend of
over 35 per cent, the bonus would be in the ratio of 1:2 (one
share for every two held). On the contrary, the bulls strongly
believe that the company is in a comfortable position to
reward investors both with a liberal bonus and a dividend.
The contrarian view has been based on the insight into the
working of the company besides the export figures.
When one actually looks into the company's financials,
Satyam Computers' equity, as compared to other software
companies, wasrelatively high at Rs 26.02 crore as on March
1998. At the same time, Infosys' equity stands at Rs 32 crore
even after two bonuses in three years. Satyam's reserves at
Rs 76.68 crore are just under three times the equity, which
yields a book value of Rs 39.5 per share. Considering
Satyam's equity structure, the bonus is unlikely to exceed 50
per cent of reserves capitalisation. Further, the company does
not have a bonus history and has not capitalised its reserves
in the past.
According to market sources, while the major software
vendors are concentrating on their fight against the Y2K bug,
Satyam Computers seems to have gone a step forward to
launch a unique product called 'Dr Millienium'. Although the
details of the product are not available, sources hinted that
the finer design is targetted at providing value added internet
service to investors especially the corporate sector. Similarly,
another rumours doing the rounds was of Satyam's subsidiary
to enter into a joint venture with KPMG .
financialexpress.com |
