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:

Promoter	Date	Transaction	Quantity	Price	Holding after Transaction
Bhupati Investments and Finance	December 2, 2011	Sell	2,360,000	25.4	18,433,580
Bhupati Investments and Finance	December 15, 2011	Sell	2,100,000	23.2	16,333,580
Bhupati Investments and Finance	February 29, 2012	Sell	175,068	22.98	16,158,512
Bhupati Investments and Finance	March 1, 2012	Sell	269,800	22.7	15,888,712
Bhupati Investments and Finance	March 2, 2012	Sell	254,862	21.87	15,633,850
Bhupati Investments and Finance	March 5, 2012	Sell	547,210	20.94	15,086,640
Bhupati Investments and Finance	March 6, 2012	Sell	28,303	21	15,058,337
Bhupati Investments and Finance	May 2, 2012	Sell	5,000,000	18.85	10,058,337
Viren Raheja	May 2, 2012	Buy	2,500,000	18.85	8,250,000
Akshay Raheja	May 2, 2012	Buy	2,500,000	18.85	8,250,000

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 / FreeDigitalPhotos.net