Rs 56-cr bonanza for Subex pref investors

The rise in the share price of the company was steep in the last four months. The shares were listed on the exchange at Rs 75 on September 3 last year and on that day, the shares were traded at Rs 140. The scrip crossed Rs 1,055 on December 14, while it closed at Rs 1,500 on December 22 and later on December 29 it gained massively crossing Rs 2,000plus.

"The company could have involved all its shareholders in the offer. Why should it make preferential issue at a low price to a particular group of investors," said a shareholder. According to Subex MD Subash Menon, with the preferential offer, the equity base has been upped by Rs 33.8 lakh reaching Rs 3.55 crore. The placement has been made to corporate bodies including Morgan Stanley, Prudential ICICI and Birla Sunlife.

"It has become a trend among companies to make preferential issues to some investors. Other retail investors are being ignored in the process," investors said, adding, "it is also time the SEBI changed the guidelines pertaining to the preferential offers". As per the current SEBI norms, the issue price is determined by taking the high-low average of the share price in the six-month period preceding the preferential offer.

This is no longer relevant as stock prices are showing huge volatility. Infotech stocks, in particular, are zooming on the stock markets and the six monthaverage doesn’t make much sense. The Subex stock itself shot up from Rs 75 to Rs 2,461 in four months, showing a rise of 3,181%. Now Aftek Infosys is planning a preferential allotment of 5 lakh shares to fund its expansion programme. The company, which claims that it has received shareholders approval for the offer, is planning to mop up around Rs 40 crore. The Aftek share which was quoting at Rs 46 earlier this year has shot up to Rs 2,479 on the BSE.