Monday, June 18, 2012

Glodyne Stake Upped by Merrill Lynch

Shantanu Rooj,
Executive Director,
Glodyne Technoserve Ltd.
By Special Correspondent:
11.59 PM IST, Monday, June 18, 2012:

Glodyne Technoserve Ltd (BSE: 532672, NSE: GLODYNE) counter in BSE on Monday witnessed a noteworthy buy of almost 2.75 lakh shares by the FII, Merrill Lynch Capital Markets Espana SA SV.

This was disclosed after trading hours at Bombay Stock Exchange on Monday.

The buy of 2,74,947 shares of the small-sized software & IT services company occurred at Rs. 417 a share, making the deal worth Rs. 11.47 crore.

StockExplain had earlier reported on two FII buys – by Merrill Lynch and UBS arm Swiss Finance - into Glodyne Technoserve stock during mid March 2012.

Those buys had happened at Rs. 330 and Rs. 352 respectively, within two days time, and since then Glodyne stock had rallied till Rs. 434.95 by early May to mark a new 52-Week High.

Merrill Lynch’s identified accumulation on Monday has come at a stage when the stock had slightly corrected from that high, and was again trying to move up.

However, Monday’s institutional buy doesn’t have as much as sheen as the earlier buys as there was an identified counterparty seller in Rinsel Technologies India Pvt Ltd which sold off 2.75 lakh shares at the same rate.

Though Rinsel Technologies is not an official promoter group company, the company seems to have deep connection with Glodyne Technoserve’s management as Shantanu Rooj, Whole Time Director of Glodyne is also a Director in Rinsel.

Shantanu Rooj is a long-term associate of Glodyne Technoserve's Chairman Annand Sarnaaik, right from its inception days as Paradyne Infotech, and Rooj is also an entrepreneur in his own might, having started the education company Broadllyne, which later Glodyne acquired.

Interestingly, on Monday, Glodyne has disclosed in BSE that official promoter group company Glodyne Global Pvt Ltd had upped its stake in the company by 0.44% during last week.

Merrill Lynch's buy during March amounted to 0.67%, and the Share Holding Pattern for the quarter ending March shows that its stake had not gone above 1%. UBS arm, Swiss Finance Corporation (Mauritius) Ltd, which had picked up a 0.56% stake in March, has also not surfaced among shareholders with more than 1% stake.

The only larger institutional investor in the counter, holding above 1% stake is Cerberus Partners LP, with a 2.28% stake. 

However, Monday's buy by Merrill Lynch comes to 0.61%, and if it has not transacted in the counter since its identified buy in March, it now holds 1.28% stake in the software company.

Rinsel Technologies held 1.76% stake as of Q4 end, of which 0.70% was under a lock-in. While Rinsel's sell on Monday signals achievement of desirable valuations in the short-to-medium term, the accumulation by Merrill Lynch as well as promoters should be comforting to investors.  

On the fundamental side, Glodyne Technoserve has had a reasonable year in FY'12 with consolidated sales up by 51.49% and consolidated net profit up by a reasonable 13.42%. But in the latest quarterly numbers, for Q4, sequential sluggishness is evident with consolidated topline improving only marginally, while consolidated bottomline has slipped both on a sequential as well as a year-on-year  basis.

The promoters hold 57.32% stake, of which nearly 84% has been pledged with SBI and Cholamandalam, as collateral for term loans and working capital loans. The promoter pledge comes to around 48.14% of the total market-cap, and is considered a risk factor in the stock if the market corrects substantially.

However, the stock can maintain its momentum if it gets further triggers like bagging of any large e-governance projects, which is a core line of its businesss, and if the upcoming Q1 numbers are reasonably good.

On Monday, Glodyne Technoserve closed trade in NSE at Rs. 410.95 down by 1.62%, in a general market whose key Nifty index was down by 1.46%.