JUNE 15-30, 2001: Lackluster Days Continue...

After weeks of speculation about the sale of Groupe
Bull’s majority stake in PSI Data Systems, all questions have been
finally answered. Indian Rayon, the AV Birla Group flagship company has
proposed to pick up the 50.35% stake in PSI from its French parent in all
cash deal worth Rs 71 crore. The price of each share is pegged at Rs
186.60 per share. Indian Rayon is also expected to make an offer for an
additional 20% at the same price at a later date. Since the announcement
of the deal, the counter has been moving southward. The PSI share closed
as the top loser of the fortnight, down 27% over its previous close at Rs
130.

Mascon Global announced a joint venture with credit
card major Master Card in which it will own 51% equity stake. The venture
named Mascon-MasterCard Global Technology Services will develop and
maintain proprietary software for MasterCard’s core processing functions
of authorization, clearing and settlement. The stock closed at Rs 61.95,
down 10.35% over its previous close. Mascon is also gearing up to come out
with an ADR issue. Analysts are, however, expecting a firm trend in the
counter whenever sentiments on software counters improve.

The company has entered in a strategic alliance with
US-based Epicentric Inc., a leading provider of next generation portal
solutions. Satyam will be responsible for providing end-to-end consulting
and integration services for Epicentric Foundation Server. The details are
not yet available. Satyam is one of the stocks on which Options shall be
introduced from July 2, 2001. The stock closed at Rs 170, losing 14% over
its previous close. The stock is expected to see buying interest in the
coming days.

The Mumbai-based software company is all set to acquire
US-based CTC Corp in an all stock deal. CTC is an IT solutions provider
offering services in the areas of technical resourcing, offsite and
offshore software development, e-business solutions and training.
Silverline shall issue 4.5 million ADRs to the US company. On the NYSE,
the company’s ADR was priced at $3.50 when the deal was announced
translating into an acquisition price of $15.75 million.

The Bangalore-based IT major has announced a strategic
relationship with US-based Burlington Northern Santa Fe (BNSF) which
operates the second largest rail network in Northern America. Infosys will
provide software integration services to BSNF and it plans to employ over
125 people during the next 18 months for the project. Towards the end of
the fortnight, the Jardine Fleming and DSP Merrill were reported to be
major buyers on the counter, citing a positive outlook for the company.

This is one of the stocks which has been on the receiving
end quite regularly in recent times, even on those occasions when most
other IT stocks have witnessed a firm trend. The fortnight ended saw the
stock as one of the major losers. Rumors were rife that the company’s
managing director DVS Raju is not keeping good health, which saw massive
selling on the counter. Although the company termed the rumors as
baseless, the stock remained under selling pressure through most of the
fortnight.