HCL Tech gets thumbs down

about 9 days ago
No Image

HCL Tech is among the top five losers on the BSE since morning, losing over 7.5% to Rs.935, continuing to languish in the red. Its 52-week low is at Rs.854.

The market hates debt and with HCL planning pile up on that in the new acquisition, it has given the stock the thumbs down.

HCL Tech is acquiring select IBM software products for $1.8 billion or for over Rs 12,700 crore in an all-cash deal. The deal will be funded largely through internal accruals, with $300 million of debt. Almost 50% of the total amount will be paid at close of the deal.

This is the biggest acquisition for HCL Tech till date, and among the largest by an Indian tech company. The deal is expected to close by mid-2019.

HCL said it foresees incremental revenue of about $650 million on a run-rate basis in the second year after the close of the deal. The first year revenue is expected to be about $25 million lower due to transition.

Popular Comments

No comment posted for this article.