Silverline up 8 per cent ahead of ADR issue

MUMBAI: Indian software firm Silverline Technologies Ltd.'s shares were trading up hitting the eight per cent circuit filter on Monday and analysts said it was a recovery from the earlier steep fall which was unjustified. The stock was trading Rs 28.35 up at Rs 383.05 on a volume of 2.5 million shares.

Silverline has fallen to less than a third of its peak price of Rs 1,395 hit in February this year. "The stock has plummetted and has fallen more than the rest of the sector and this is perhaps a reversal of the overreaction," said Shekhar Singh of SBI Capital Markets.

"The company has cleaned up its balance sheet and profit and loss account to a large extent and has begun reporting according to US GAAP standards....this is a good sign," he said. Silverline recorded a net profit of Rs 69.88 crore in the year ended March 31, 2000 compared with Rs 41.15 crore last year.

The basic earnings per share of Rs 11.85 rupees is up from last year's Rs 11.39. The company has announced plans to issue American Depositary Receipts aggregating $125 million in the U.S. for which it has already filed documents with the Securities and Exchange Commission.

Analysts said some buying could also be in anticipation the company will price its ADRs at a hefty premium to the Indian stock price and a subsequent realignment of prices.

(C) Reuters Limited 2000.