CESC stock slumps 18% on Firstsource Solutions deal

Power company CESC shares slumped on Friday following the company's offer to buy 49.5 per cent stake in Firstsource Solutions (FSL) for Rs 394.9 crore in all cash deal through its wholly-owned subsidiary SpenLiq.

The stock tanked 18.67 per cent to Rs 270 on the BSE. A similar selling pressure was seen on NSE, where the stock tumbled 17.74 per cent to Rs 271.80.

Shares of BPO service provider Firstsource Solutions also dropped 12.21 per cent to Rs 12.50 on the BSE.

Experts said CESC scrip fell on investor apprehensions over the impact of the deal on the company.

"FSL's shares fell as the offer price announced by the acquirer was less than the prevailing market price. On the other hand, CESC tumbled as the deal between the two company is not complementary given the different business interests of the two firms," Ashika Stock Broking Research Head Equities Paras Bothra said.

CESC on Thursday offered to purchase 34.5 per cent stake at Rs 12.10 per scrip initially in BPO service provider FSL, and additional 15 per cent stake for Rs 12.20 from one of the promoter companies ICICI Bank and two investor firms - Metavante Investments and Aranda Investments.

Firstsource had said its Board of Directors have resolved to issue around 22.69 crore shares to SpenLiq, which constitute 34.5 per cent of post issue paid-up capital of the company.

"Given the current limitations of growth in the power sector, we have been looking at entering the BPO space for a while. FirstSource presents a very good opportunity in high growth BPO verticals and has a very strong management team," CESC Ltd Vice-Chairman Sanjiv Goenka had said.

In the broader market, the BSE 30-stock index, Sensex, was trading at 18,641.80, down 116.83 points at 1146 hrs. PTI SUM

With PTI inputs