The scrip price of Hughes Software Systems tumbled by over 7.2 per cent to Rs 327.45 after hopes of an open offer fizzled out. A total of 4.64 lakh shares changed hands on the Bombay Stock Exchange (BSE).
The Securities and Exchange Board of India (Sebi), in a recent hearing to the Hughes group of companies, has exempted US-based Echostar, the new parent, from making an open offer for a 20 per cent equity stake in Hughes Software and Hughes Tele.com.
The sharp fall comes after the stock had surged in the last few trading sessions. In the last seven sessions, the scrip, from a recent low of Rs 283.40 on 1 January, had spurted by 24.5 per cent to settle at Rs 352.85 on January 10.
From an earlier low of Rs 263.70 on December 3, the stock had surged by 33.8 per cent to Rs 352.85 on 10 January 2002 on expectations that an open offer may be forthcoming following the global change of its parent company. There were hopes that the open offer, which was to be made at an average price of last 6 months, would be at a substantial premium to the ruling market price.
General Motors Corp had, in late October 2001, sold its satellite television unit Hughes Electronics Corp to EchoStar Communications Corp for $25.8 billion in cash and stock. Hughes Network Systems (HNS) holds majority stake in Hughes Software (HSS). HNS is a division of Hughes Electronics.
A telecom software major, HSS is witnessing hard times due to tough conditions prevailing in the US telecom sector. HSS had posted a massive 52 per cent fall in Q2 net profit to Rs 6.3 crore on a 20.33 per cent rise in turnover to Rs 57.40 crore.
HSS' total income also declined, when compared to the immediately preceding quarter ended June 2001, by 13.8 per cent to Rs 57.40 crore from Rs 66.60 crore.
Meanwhile, HSS, early last month, announced that it has teamed up with Motorola to provide advanced third-generation mobile data protocol hardware and software platforms.
