Open Offer Hopes Lifts C-Mac

The share price of C-Mac Centum today hit the 20 per cent upper limit for the third straight session on hopes of an open offer from the company's new parent.

On the Bombay Stock Exchange, the stock settled at Rs 43.65. More than one lakh shares changed hands at the counter. From Rs 17 on March 1, the stock has gained over 156.76 per cent on renewed buying.

The US-based Solectron acquired C-Mac Centum's parent C-Mac Industries in an all-stock deal valued at $2.7 billion on August 8, 2001.

Under the Securities and Exchange Board of India (Sebi) takeover regulation, the change in management triggers off an open offer and thus there are hopes of the same. Under the Sebi takeover code, it is mandatory for anyone buying a 15 per cent or more stake in a company to make an open offer to buy at least 20 per cent from public shareholders.

Apart from the open offer, investors expect C-Mac Centums' business to improve. Solectron manufactures electronic components for the telecom segment.

Following the change in management, C-Mac Centum will have a captive base of customers. C-Mac Centum manufactures hybrid micro circuits, crystal oscillators and resistors networks and sells them in global markets.

The company derives almost 42 per cent of its revenues from exports. C-Mac Centum also sells its products to Solectron and with it becoming a subsidiary of Solectron it will have a large internal customer and this is a huge potential for C-Mac Centum, analyst said.

C-Mac Centum will also be able to increase its product range to service the needs of Solectron apart from other customers. C-Mac currently employs 225 people and has been seeing better times in the recent past. The company was set up in 1995.