Depends how one look at it. Mr Market has given an opportunity as late as March end to buy shares. If one would have shares around 200-225 and held it until he gets cash, that is still handy return of 3-4 times in less than a year (I am assuming that shareholder will get paid by next march).
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A fund bought a large stake recently incidentally. Interesting timing
Hi. Any idea why will the indian shareholders only get 852 per share when the consideration price at current exchange rate is approximately 982 per share?
The press release says 852. Again net of tax I donât know what we get in hand.
With time things will be clear.
To add that the deal is subject to shareholders approval so letâs see which way it goes.
Regardless of the outcome it is clear that the stock is clearly undervalued.
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Is there any cut off date or still we can buy and get paid $13 USD ? I have shares in US account So any inputs will be greatly appreciated
There is some lawsuit filed in US regarding this PE acquisition questioning whether it was best in interest of shareholdersâŚwe will have to wait and see how this pans outâŚbut already US shares trading above $13.10 âŚproposed payout price
Yes, some lawsuit firms are planning to get it investigated. Bt thr premise is that the takeover price is too low. What if the company goes into bidding mode and this gets revised⌠
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The CFO indicated that most of the amount will be paid as dividend. This will bump up the tax bracket and then net of tax, the actual return on investment for many long term shareholders will be disappointing. At least if it was a 100% buyback, LTCG would be better rather.
Besides, the Indian stock has a circuit filter so the pace of upmove will be slowed. We need to see until what price point the upper circuit moves will go. Beyond, 650 itâs anyoneâs guess.
Hope this deal fails
Majesco owns land at mahape, what can be its value?
CFO said it canât be ascertained now. But that money God knows if itâll ever reach shareholders after future monetizing.
Sir can lawsuit against this deal could seriously results in increase in deal price? What ev to sales u think is fair?
Hi @Divyanshu_Taneja , I think the PE funds have given a fair deal to Majesco and as they say, âThe beauty is in the eyes of the beholderâ. Until there is another bidder who finds better utilisation of Majesco products comes into the picture, the current deal shall stands. Additionally, the major shareholder of Majesco are their promoters who knows the products business for more than 30 years (with Mastek), and all of them have agreed on this sales. In my view considering their expertise and experience, they found this deal more suited.
Bear in mind that Insurance is a slow-moving business, and it will take them a while to report increased profitability. So in my view, this is not bad deals given the current situation. I would have preferred them to be listed, but I wonât complain if I get cash either.
I know they have building in Mhape, it may be worth anything from 20-40 cr (guesstimate), but I do not think it would add much value to the cash disposal the management is talking about. In my rough calculation, Majesco shareholder shall get around Rs 870- 890 cash (assuming another Rs 20-25 per share after disposal of real estate).
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Thanks @paragbharambe, you are regularly sharing updates about the company.
I have a query on future of Majesco post this deal as the company has not spoken about delisting. After selling its only operative business (i.e. stake of Majesco US) the company is left with almost nothing. The shares are already locked in UC since past couple of days and may continue to do so for coming several days.
But what would happen post receipt of the windfall by every shareholder? Everybody would want to sell and exit. So the LC would start till the shares value becomes worthless⌠What are your views on this pls? Rgds.
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@advait
In my view, Majesco will do a combination of buybacks, return cash and dividend, instead of just relying on one mechanism.
Honestly speaking, 99% of Majesco revenue comes from the US subsidiary, and only 1% comes from the Indian subsidiary. It wonât far fetch to think that Majesco US will acquire that part of business as well by paying some amount, however notational it may be.
Once they repay Rs 852 to the shareholders and additional funds after selling real estate assets and other assets, the company will be pretty worthless. In fact, the management does not want to give any other picture, so they may delist the share or do a buyback. I cannot think of the reason for not doing buyback and cancelling shares and instead returning cash return. May be Indian promoters are keen on cash. However, I have not seen a similar situation played out in other companies, so I am afraid I cannot add much to the discussion.
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Tax wise, dividends would be highly inefficient, buybacks @20% taxed at company level. Delisting makes more sense in that case max 10% LTCG or 15%STCG.
Company has put this for shareholders approval, so highly likely that approval will be given since ~80% is held by promoters and mastek.
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Buyback is taxed @ 20% if STT is not paid by the company. If STT is paid, the usual capital gains applies.
Today majesco is seeing high volume. Any new developments? Or pledge related?
I thought shares arenât available and hence the last few days saw neglegible volumes
Circuits seem to have ended. Any reason? Mjco price is still constant