Desi funds log off Polaris Software

STREET SIGNS

Desi funds who were betting on Citigroup offloading its 43 per cent stake in Polaris Software Labs were sorely disappointed.

Some time ago, there were media reports saying that EDS was eyeing Citigroup's stake in Polaris. Following the news, the funds went on a selling mode.

One desi fund sold more than 5 lakh shares of Polaris at Rs 133 levels. The stock also seems to be heading south after crossing Rs 155 levels a fortnight back.

Citigroup is said to be unwilling to make an exit from Polaris - as it did from i-Flex by selling its stake to Oracle - as the software company invested about Rs 100 crore in its service-oriented architecture and made additional investments in its BPO.

These investments will take time to earn returns, which means Citigroup will wait for the profits to kick in. Polaris reported a 46.20 per cent fall in net profit at Rs 12.96 crore in the first quarter of 2005-06, compared to Rs 24.09 crore for the same period in the previous year.

Changing gears

Interest in two-wheeler counters seems to be picking up. Phoenix Fund was among the buyers at the TVS Motors counter. Uncle Sam's analysts had recently maintained their 'overweight' stand on the stock and had revised the target price to Rs 112.

The stock has been hovering around the Rs 90 levels for some time now. TVS Motors reported a 16 per cent rise in sales at 121108 units during September 2005 as compared to 104837 units in the same month last year.

Concor capers

There was a big deal involving Lending Brokerage and another foreign fund at the Container Corporation (Concor) counter. Lending Brokerage is said to have sold 9 lakh shares at Rs 1320.

Concor plans to spend about Rs 2,500 crore as capex over a five-year period, with the main expenditure expected to be towards container acquisition, developing inland container depots and meeting joint venture commitments.

The company plans to spend Rs 250-300 crore annually on acquiring at least 1,000 wagons each year.

Phoren influence

While the markets have been see-sawing, it hasn't stopped foreign funds buying stocks in the mid and small-cap segment.

Castro Fund was been on a buying spree at the Mahindra Gesco Developers counter of late.

Needless to say, the stock has been on fire too, with the price appreciating from Rs 198 levels in early September to the current Rs 275 levels, representing a 38 per cent jump in less than a month.

The current buying interest at the counter seems to have been sparked after the Monetary Monastery raised the FII investment ceiling in the stock to 30 per cent from 24 per cent following approval of the company's board and shareholders.

FII holding accounted for 22.2 per cent of the equity capital as on 30 June 2005.