[Ed. Note – This article does not meet our new editorial guidelines, nor does the company profiled meet our investment criteria. Both will be removed from the site in the future.]
Glodyne Technoserve Ltd (BSE:532672) is an IT Services company, headquartered in Mumbai, India with presence across India and US. The company offers technology led business solutions across two SBU’s, namely Technology Infrastructure Management Services (Technology IMS) and Application Software Services. The company is an ISO 9001:2000, ISO 27001 and CMMi certification. Glodyne Technoserve Ltd was incorporated on December 5, 1997, as a private limited company with the name Paradyne Infotech Pvt Ltd. The company was promoted by Annand Sarnaaik and Divvyani Sarnaaik.
For the last financial year ending March 2012, earning per share of the company was Rs 58. The company was doing well till June 2012 then it start showing loss. The company stated that in a note with September quarter result, it made provision for Doubtful Debts of Rs. 622.8 million and of Rs. 482 million for the quarter ended December 31, 2012. If we deduct those from net profit we will get some positive figures ie we will get net profit. But those figures will be much smaller compare to its privies quarters, suggesting fundamental weakness in the company.
| Quarter Rs Crore | Dec ’12 | Sep ’12 | Jun ’12 | Mar ’12 | Dec ’11 |
| Total Income From Operations | 240.45 | 343.74 | 414.92 | 422.7 | 398.9 |
| Employees Cost | 27.3 | 32.42 | 36.15 | 35.83 | 34.89 |
| Net Profit/(Loss) For the Period | -29.55 | -49.47 | 76.03 | 55.69 | 75.14 |
| Diluted EPS | -6.65 | -10.96 | 14.27 | 10.13 | 15.88 |
| Public Share Holding % | 64.26 | 52.15 | 42.42 | 42.68 | 42.68 |
(Source: moneycontrol)
As you can see in the chart the share price has fallen despite the good June 2012 quarterly result. Why has it crashed before the September 2012 quarterly results? If we look at the share holding pattern, the promoters have sold 10% of the company’s equity. As per the data taken from Bombay stock exchange website you can see that promoters shed their holdings to 47.58 % from 57.58%. They were surely aware of company’s bad financials.
Looking at insider trading disclosure by the company we find that since August 2012, the promoters are constant sellers in their stocks. You can see their holdings now stands at 25.96% and they are still selling. We can say insider selling can be the cause of price cash further fuel by bad results. Furthermore, on February 15, 2013 investor group Glodyne Global Pvt. Limited, has surrendered their 1,500,000 share warrants, suggesting they are not interested in converting them into equity shares.
Changes in Percentage Ownership (2012-2013)
| Quarter | Mar-13 | Dec-12 | Sep-12 | Jun-12 | Mar-12 |
| Promoter Group | 25.96% | 35.74% | 47.85% | 57.58% | 57.32% |
| Public | 74.04% | 64.26% | 52.15% | 42.42% | 42.68% |
| Public holding includes | |||||
| Institutions | 7.19% | 7.36% | 7.86% | 7.89% | 7.05% |
| FII | 4.58% | 4.68% | 5.20% | 6.47% | 6.49% |
| DII | 2.61% | 2.68% | 2.66% | 1.42% | 0.56% |
| Non Institutions | 66.85% | 56.90% | 44.29% | 34.53% | 35.63% |
| Bodies Corporate | 25.57% | 23.76% | 20.58% | 18.32% | 16.15% |
(Source: BSE)
Insider Trades
| Name of Acquirer / Seller | Transaction Date | Buy /Sale | Mode of Buy /Sale | No.of Shares Transacted |
| Annand Sarnaaik | 23-08-12 | Sale | Market | 187505 |
| Annand Sarnaaik | 22/08/2012 – 23/08/2012 | Sale | Market | 187505 |
| Annand Sarnaaik | 22/08/2012 – 23/08/2012 | Sale | Market | 980316 |
| Annand Sarnaaik | 22/08/2012 – 23/08/2012 | Sale | Market | 980316 |
| Glodyne Global Pvt Ltd | 21-08-12 | Sale | Market | 250000 |
| Glodyne Global Pvt Ltd | 21-08-12 | Sale | Market | 250000 |
(Source: BSE)
It’s now clear that promoters are abandoning the company. With no hope of revival in recent future the investors are advised to exit their positions.