Investment Advisory Service

Thursday, 12 January 2012

R Systems- Update 1

As per the recent amendments in the Takeover Code, a committee of independent directors need to give their recommendations to the shareholders on the open offer. Complying with that, R Systems has constituted a committee. It will be interesting to see what recommendations they come out with !

Here is the BSE announcement :

R Systems International Ltd has informed BSE that pursuant to the provisions of (Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 the Board of Directors of R Systems International Limited (the Company) has constituted, by passing necessary resolutions through circulation, a Committee of Independent Directors, namely Mr. Raj Kumar Gogia, Mr. Suresh Paruthi and Mr. Gurbax Singh Bhasin to give reasoned recommendations on the Open Offer given by Mr. Bhavook Tripathi for acquiring 26% shares of the Company in terms of Public Announcement dated December 15, 2011 and Detailed Public Statement dated December 22, 2011.

Meanwhile the promoters have been continuously buying shares from the open market.

11 comments:

sameer said...

Hardly anybody talks about these market strategies.

Everybody talks about ROE, great brands etc. High PE companies like Nestle, titan,Hero Honda etc

Wrt that ur blog is unique.
thanks for sharing such. kind of info.
This is good way to learn about markets.

sameer said...

Hi Ankur,
1)Promoters continuously buying
2)huge cash on book
3)BT is market participant and not businessman

Are these not sufficient reasons for sure open offer from promoters???
(Don't know if CMP 140 is good knowing Rs.18 difference between open offer from BT and CMP)

Regards
Sameer

Ankur Jain said...

Hi Sameer,

Thanks for the comments. The interest in any opportunity is directly proportional to the amount of money one can deploy in an idea. Since large amounts of money can't be deployed in this field, not many people are interesed in picking up the pennies.

However, this also leads to lesser competition and ocassionally there are opportunities in special situations which can take large amounts of capital and offer salivating returns.

Thanks
Ankur

Ankur Jain said...

I am not sure if the promoters will come out a counter offer. Yes, they are buying from the market but they can buy additional 5% without making an open offer. As I mentioned in the post, I don't find the promoters vulnerable at 47-48% stake.

The liquidation value of the property of the company along with the cash might be much higher than the current market price. But one doesn't know the fate of hostile takeovers. There have been enough examples where people have invested and have been tired out waiting for the value to emerge.

sameer said...

Hi Ankur,
I think bidding process for UTV is going on. Can we see tendered prices (while bidding going on) to see
1)If yes can u point to the link for UTV for seeing tendered price so far?
2)Can u point to link where we can tender our UTV shares?

Ankur Jain said...

Sameer,

You can check the reverse book building @ BSE website>Public Issues/ Buyback> Reverse book building > Live.

Please keep in mind that bidding forms are accepted at multiple centers across the country and it might take some time for the bids to be verified and uploaded on the website. So, the data you see on the website might lag the real data by a few hours.

The reverse book building (RBB) happens differently than the book building that happens in case of an IPO. There is no link where one can tender his shares in RBB. One has to transfer his shares offline in an escrow account, fill up a bid form, fill in the tender price and then submit the form at the designated center. Later the same bid is updated on the BSE website. If you haven't received the bid letter, the same can be obtained from the SEBI website.

Anonymous said...

It seems that Promoters feel that they have done sufficient to thwart BT attempt to get his way through open offer. It will be interesting to see if BT up's the open offer price. Only then the second round of hostilities will start.

Anonymous said...

The way the promoters are increasing their stake, it seems that there can be another open offer round the corner. If that happens then the stock can fly off from current levels. (Remember that there was a share buy back by the company some couple of years ago, which has already diminished the supply in the market and hence the float at present would be very minimal.)

Ankur said...

Hi Anonymous,

You are correct. Promoters are buying from the market on a daily basis. Let's see how this one turns out. But promoters own close to 48-49% and they are sitting pretty.

Anonymous said...

The company is giving its reasoned recommendations and it is but natural that when the share price at present is around 160, there will be hardly any reason for subscribing for open offer of BT. All said, why are promoters still buying from open market? There is something cooking which market is still not able to read.

Anonymous said...

As expected the open offer price has been revised to 150.05. This is clear next round of hostilities. How is this going to change the stance of promoters who have been buying steadily from open market, needs to be seen.