KPIT Tech recoups after clarification

KPIT Technologies had hit a new 52-low yesterday at Rs.85.05. Apart from estimations of a decline in margins in Q1FY16, the market was more perturbed about rumours floating of the promoters selling stake.

Yesterday, after market hours, the company issued a clarification. It stated categorically that the promoters did not have any intention of selling stake. The stock exchange has sought clarification and the company stated, “There has been no change in the shareholding of foreign institutional investors and domestic institutional investors which, in fact, has marginally increased from 54.06 per cent to 54.15 per cent, according to last week's shareholding data."

This apart, the company assuaged all fears further by sweetening the sour taste with a proposed 55% dividend. It said, "the board of directors of the company have proposed to the shareholders, declaration of dividend at the rate of 55 per cent (Re 1.10 per share) at the forthcoming annual general meeting and there is no thought of cancellation of this dividend.

There was a malicious SMS floating around in the market about KPIT which suggested that the company might become the next Satyam Computers. It said that promoters were reducing stake and so were FIIs and DIIs. The SMS said that the company was cancelling the dividend.

The company has stated that it will be taking legal action against whoever had sent this SMS.

The stock price has recouped today after this clarification and it is currently up almost 2.5% at Rs.92.35 with an intra day high at Rs.92.80. Volumes are pretty robust at over 6.5 lakh shares being traded.