Firstsource acquisition negative for CESC: SP Tulsian

CESC may slip below Rs 300, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Firstsource news will be quite negative for CESC. Firstly, it is totally unrelated. Secondly, the entire cash amount, because the total outflow including the open offer for the company will be somewhere around Rs 600 crore plus, because the 26 open offer on the expanded equity will suck the entire 30 percent, which is held by the individual shareholders. So I do not think that there is any kind of justification.”
He further added, “The only solace in case of Firstsource is that it is not a loss making company. They have a very meagre net profit, but that will not be sufficient, because if you have an Rs 600-700 crore cash balance in your books, that is in the books of CESC and if you are deploying that money just to earn nothing out of this.”
“Yesterday I have heard Sanjiv saying that the existing team is very good. If he is relying on the existing team which has been there for the last couple of years after the Ananda Mukherjee has left the company, I am not trying to say that existing team is not competent enough, but they would have then definitely ramp-up the financial performance of the company as well. It is a very good BPO company but I do not think that there is any kind of financial sense or even the strategic sense behind this acquisition by CESC. So definitely it will be negative. I will not be surprised to see the share price falling to Rs 300 maybe in next week to 10 days.”