3i Infotech hits upper circuit

3i Infotech is on the buzz. the stock has breached the 5% upper circuit at Rs.7.25, with volumes spiking up 1.5 times.

The stock is frozen on the upper circuit on news report stating that the company’s priority is to repay at least 20-30% of its debt through sale of assets. The company is in the current situation because it went through a phase of mindless acquisitions. Till 2009, the company had gone on to acquire some 40 companies!

The report in Business Standard states that the company has restructured debt of Rs 1,300 crore, at 14.75% rate of interest. It converted the rupee loan into a dollar loan of $215 million at an interest rate of 6.5% plus three-month London interbank offer rate. Additionally, the company has a FCCB repayment worth $93 million that matures in 2017.

The company has now set itself a target of 10-15% growth rate for the topline and 20% for EBIDTA over the next five years.