There were unconfirmed reports that the Savvy Fund Manager and Skrodders had dumped shares of HCL Technologies after the announcement of the company's financial performance on Tuesday. Though the results are in line with market expectations, some mismatch in the numbers was being talked of. While most front-line technology stocks talk of a 30-40 per cent growth target, HCL Tech has come out with a lower 25 per cent growth expectation.
Talks are that Skrodders was seen selling in the HCL Tech counter. The conference call was a disaster and many of the funds have gone negative on this counter, said dealers. The company had also arranged a conference call for fund managers who are reported to have been peeved at HCL Tech's projected growth of 25 per cent -- which means only a 20 per cent growth in dollar terms.
To add to the woes is the indication that this growth includes growth through other initiatives such as acquisitions. The last nail in the coffin was the indication that the growth will mostly be during the later half of next year, which essentially means that the next two quarters are unlikely to be positive.
Big Daddy
Big Daddy has been a big seller in the market in the last couple of days, which has kept the sentiment depressed. It is indicated to have sold about 60,000 shares of Infosys Technologies, and an equal amount of Wipro. It is also reported to have sold about 1 lakh shares of Balaji Telefilms, another lakh shares of Ranbaxy and about 1.75 lakh of ICICI and ICICI Bank each.
Though the selling spree is not entirely unexpected as Big Daddy has to raise resources to meet its obligation, it does have a dampening impact on the market. However, reports that the Life Saver in Death will buy 41 blue-chip stocks from UTI in off-market deals should reduce pressure from these stocks. This is significant as the current market value of these stocks is around Rs 930 crore which if tried to be liquidated in the open markets would have created a price depression in these stocks. The deal should give a breather to these stocks for the moment by reducing the overhang on this account.
However, since the cost of purchase to Life Saver fund is expected to be at the current market price, it will be induced to sell at the slightest price appreciation in these stocks. This could also result in these shares finding their way back to the markets which, however, should happen gradually. The deal, however, means that Big Daddy can use these monies to increase the debt component of its portfolio and hence it is also deprived of gains accruing in the future had it still continued to hold these stocks.
The off-market deals will also bring savings on brokerage charges for both the institutions. In certain cases, Life Saver Fund would gain in terms of increase in holdings where it has some strategic designs on companies like OBC and Corporation Bank.
Tailpiece
There were reports that Asian House bought 2 lakh shares of Pentamedia Graphics while Life Saver Fund bought 50,000 shares of Tata Tea and 32,000 shares of Castrol. It seems Numero Uno was peeved at analysts' meet of Zee Telefilms and has reiterated its sell call on Zee and sold 3 lakh shares. It has replaced the lot by buying 50,000 shares of Bajaj Auto and 30,000 shares of Cipla. Y Car is reported to have sold 3.5 lakh shares of Satyam Computer Serivces on Monday.
