Market Analysis: Review on Monday, Jan 3

Corporate

Hind Copper FPO may be at big discount

Hindustan Copper follow on offer may be priced at less than a third of its current market value. The shares may be priced at around Rs 100 a piece, compared with a last traded price of Rs 335 on Thursday, Dec 30. As per the Red Herring Prospectus, this is the floor price. However, the actual price band will be decided by the empowered group of ministers.

As per the bankers involved in the share sale, there is no relevance of current market price with the Company's inherent strength. Concerns that the government may not be able to meet its Rs 40,000 crore disinvestment target for the year, may force the Company to issue shares at low price.

iGate to buy 60 percent in Patni Computers

iGate Corporation will sign definitive agreement to buy a 60 percent controlling stake in Patni Computer Systems from founders and private equity investor. As per the Company sources, the board of Patni Computers Systems will meet on Monday, Jan 3 to approve the transaction as well as the open offer.

According to the people familiar with deal structure, the deal is likely to be executed at a price of around Rs 500 per share. iGate is backed by Apax Partners LLP which makes investments across sectors including technology and telecom. Apax Partners will invest in an iGate holding Company which may later be used as an intermediate vehicle to facilitate a merger between iGate and Patni.

Rains drown India's crop estimates, stoke inflation

Unseasonal rains beyond the monsoon wipe out India's major crops. Rains are hampering the sowing of winter wheat, coarse grains and oil seeds. Putting further pressure on food inflation that touched two-and-a half month high at 14.4 percent on Thursday.

A good monsoon and prospects of a bountiful Kharif harvest had led the government to confidentiality claim that food would turn cheaper after the harvest is in by Oct 2010. By end of Oct 2010, the north had got 359 percent extra rain, Central India 100 percent, Tamil Nadu 20 percent and the country 40 percent as a whole.

(An article by DAS CAPITAL MANAGEMENT AND ADVISORS Pvt Ltd)