The Hindu Business Line : India Infoline up on foreign brokerage interest talk

Whispers of a foreign brokerage looking to pick up a significant stake in equity firm India Infoline Ltd have been driving the company's stock on the bourses. The stock, which ended almost 10 per cent up at Rs 275.10 on the BSE today, has appreciated by almost 56 per cent over the past month. The stock has gained more than 41 per cent over the past seven trading sessions, going by BSE data.

According to market men, DSP Merrill Lynch and Citigroup are the two names being mentioned to strike the deal.

When contacted, Mr Kapil Kishan, CFO, India Infoline, told Business Line there is no such move "currently" to unload a strategic stake. On the market talk Mr Kishan said DSP Merrill Lynch Capital Ltd already holds a 4.25 per cent stake in the company through the secondary market route.

Additionally, DSP Merrill has also subscribed to optionally convertible bonds, which once converted would push up Merrill's stake to 13 per cent. Citigroup has some portfolio investment through its various funds. In fact, according to the company's shareholding pattern for the quarter ended September 2006, Citigroup Global Markets Mauritius Pvt Ltd has 7.03 per cent stake in India Infoline.

Analysts maintain that with overall market volumes going up, broking firms are again coming on the market radar. Given the renewed interest, the interest in the company's stock could mean a possible re-rating, they say.

The company has given guidance of consolidated revenues in the range of Rs 380-425 crore (up 74-95 per cent y-o-y) and consolidated PAT in the range of Rs 75-80 crore (up 53-63 per cent y-o-y), for the year FY-07.