HCL Tech up 5% ahead of ADR

NEW DELHI: Shares of Indian software services firm HCL Technologies Ltd. were

up five per cent on Tuesday with dealers attributing the jump to investor

anticipation of the firm's planned overseas listing.

At 12:25 p.m. (0655 GMT), HCL Tech was quoted 5.03 per cent or Rs 36.30

higher at Rs 758 while the 30-stock benchmark Bombay exchange index was flat at

4,228 points.

"There is all-round fund demand for HCL Technologies ahead of its ADR,"

said Vijay Bhatia, vice president-institutional sales at Motilal Oswal

Securities. "The near-term target for the share is Rs 800."

HCL Technologies has government approval to raise up to $500 million through

American Depositary Receipts (ADRs). Analysts expect the listing to occur in

January but the company has set no official date.

Amit Khurana, analyst at Birla Sunlife Securities, said: "There is a

re-rating and bottom-fishing on the stock as it is one of the cheapest in the

top-five software companies based on turnover."

"The firm has also been interacting positively with the analyst

community in the past couple of months. Added to this is the demand ahead of the

ADR," Khurana added. Khurana projected a 37 per cent rise in the firm's

June 2001 turnover to Rs 12.7 billion ($271.5 million). Net profits could rise

by 44 per cent at Rs 3.36 billion.

At Rs 758, HCL Tech is 50 per cent below its calendar high of Rs 1,510.50

struck on February 21, but is quoting 77 per cent above its low of Rs 428.50

touched on October 12. The firm declared a two-for-one stock split in September.

Consequently, its share has a face value of two rupees each.

(C) Reuters Limited 2000.