Shares of Patni Computer Systems, India's sixth largest IT firm, today dropped by about 3 per cent on the Bombay Stock Exchange (BSE), losing bulk of the gains over the past four weeks.
Shares of company closed at Rs 471.75 on the BSE today, down 3.01 per cent from the previous close.
The three Patni brothers and private equity firm General Atlantic Partners are looking at selling 45.74 per cent and 17.44 per cent stake, respectively, in the country's sixth largest IT firm.
Since December 1, shares of the company had gained over 4 per cent to settle at Rs 486.4 yesterday on the BSE.
"It has to be carefully assessed if there is any 'non-compete fees' involved in the deal structure. If there is any such 'non-compete fees', then only promoters will be entitled for such fees," SMC Global Securities Strategist and Head of Research Jagannadham Thunuguntla said.
Patni's revenues for the year ended December 2009 stood at Rs 30,43.46 crore ($655.9 million).
"Irrespective of who is the new owner, it will be a new start for Patni. There will be a clear roadmap and the company will compete not just with the tier II players, but the major league players as well," research firm Gartner Senior Analyst Arup Roy told PTI.
The market watchers remains split on the success of the acquisition. "The deal will not be comfortable for both the companies. There will be overlapping of different verticals and immigration of businesses of both the companies will be a major challenge," Angel Broking IT- Analyst Srishti Anand said.
However, Roy presents a different view. "Though there will be initial hiccups like people leaving the firm or clients walking out, it will settle down and the company would have a more clear roadmap of growth," Roy said.
Closure of the deal would mark the culmination of several efforts made by Patni's promoters and General Atlantic to sell stake since 2007. Earlier attempts to sell stake had failed because of disagreements between the brothers and high valuation expectations of the sellers.
