Shares in Patni Computer Systems Ltd rose as much as 9 percent on reports that private equity firms are close to buying a stake in the $1.3bn software services firm.
BANGALORE: Shares in Patni Computer Systems Ltd rose as much as 9 percent on Tuesday on reports that private equity firms are close to buying a stake in the $1.3 billion software services firm.
"Patni shares are up mainly on hopes that the company will be able to strike a deal with a private equity firm soon. Earlier, the deal had hit a roadblock, but now it' s shaping up in a better way," said Nimesh Mistry, a sector analyst with Man Financial.
At 12:23 p.m. shares in Patni were up 7.7 percent at 421.60 rupees, while the sector index was down 1.7 percent and the main market index had lost 0.5 percent.
The Business Standard reported on Monday that private equity firms Texas Pacific Group [TPG.UL] and Apax Partners were close to buying some of the stake owned by Gajendra and Ashok Patni, two of the three brothers who set up Patni Computers in 1978.
Chairman and Chief Executive Narendra Patni, who holds about 15 percent of the company, would buy some of his brothers' holdings, which total about 29 percent, and the private equity firms would pick up the rest, the paper said, citing unnamed sources.
On Tuesday, the Economic Times said that negotiations between a clutch of private equity firms and the Patnis' and a decision by General Atlantic Partners to exit from the Indian firm had removed some obstacles to a stake sale.
A spokeswoman at General Atlantic, which owns about 16 percent of Patni Computers, was not immediately available to comment on the report, while the Indian company said it was not aware of any planned sale of a large stake.
"Patni Computer Systems has not been informed by any of its large investors of their intent to offload any stake in Patni. As a policy, the company does not comment on market speculations," it said in a statement.
In June, Narendra Patni told that, like any shareholder, his brothers were free to sell their holdings. Patni, which counts General Electric Co. and ABN AMRO among its clients, posted a net profit of 1.48 billion rupees in the June quarter, a turnaround from a loss of 933.24 million a year earlier.
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