Thursday, May 10, 2012

Update on Sonata Software

I had written about Sonata Software being a value buy or a value trap on 18 December, 2011. The company's share price at that time was hovering around INR 23 and is still trading at INR 21 and change. I dug more data on insider trading in the company to find following:
PromoterDateTransactionQuantityPriceHolding after Transaction
Bhupati Investments and FinanceDecember 2, 2011Sell2,360,00025.418,433,580
Bhupati Investments and FinanceDecember 15, 2011Sell2,100,00023.216,333,580
Bhupati Investments and FinanceFebruary 29, 2012Sell175,06822.9816,158,512
Bhupati Investments and FinanceMarch 1, 2012Sell269,80022.715,888,712
Bhupati Investments and FinanceMarch 2, 2012Sell254,86221.8715,633,850
Bhupati Investments and FinanceMarch 5, 2012Sell547,21020.9415,086,640
Bhupati Investments and FinanceMarch 6, 2012Sell28,3032115,058,337
Bhupati Investments and FinanceMay 2, 2012Sell5,000,00018.8510,058,337
Viren RahejaMay 2, 2012Buy2,500,00018.858,250,000
Akshay RahejaMay 2, 2012Buy2,500,00018.858,250,000
Except for the last two transactions, all of them are sale of shares by one of the promoter group companies and that too at prices going lower and lower and even the buys are inter-promoter transfer. Even though Bhupati Investments held 15,058,337 shares after March 6 transaction, due to pledging, they held just 933,337 shares on 30 March, 2012. The same promoter released some of his pledged shares on April 30 to take shareholding to 5,283,337 and sold 5,000,000 of them to other promoters on May 2.

There were rumors of multiple companies including Wipro, Oracle and  HCL, Ingram in race to acquire Sonata in the later part of 2010 when the share price was hovering around INR 60. Now when the price is one third of that, nobody is talking about any acquisition. Even the above trading shows conflicting views of two different promoters on the company's future. Let's see which promoter turns out to be right.

Image: worradmu /
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1 comment:

Inquisitive Stranger said...

actually i was thinking of buying the stock when you posted, but then i saw that Bhupati investment was selling it so i didn't.

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