HCL Infosystems surges on Lenovo interest report

• Posted by Sindhuri G August 28, 2012 - Filed in Business - 2,106 views

  

  Shares of HCL Infosystems surged over 15 per cent after a there was a report that Lenovo Group is in talks to buy a 50.1 per cent controlling stake in the Indian company

  MUMBAI: Shares of HCL Infosystems surged over 15 per cent after a local newspaper reported Lenovo Group is in talks to buy a 50.1 per cent controlling stake in the Indian company for around 5 billion rupees ($89.81 million).
  
  The newspaper reported the talks, citing unnamed senior officials at Lenovo and investment bankers familiar with the development.
  
  HCL Infosystems shares were last up 15.1 per cent as 0407 GMT. Lenovo shares were down 1.09 percent. ($1 = 55.6750 Indian rupees)
  
  Earlier this week, ET reported that Lenovo India is expecting more sales from smaller cities compared to their bigger peers. A majority of its new openings will also be in the smaller cities, said a company statement.
  
  "Our 55% revenues might come from tier-2 and tier-3 markets, while the share of tier-1 markets in future is expected to be about 45%," said Lenovo director Rajesh Thadani told ET.
  
  At present tier-1 cities and the smaller cities have equal share in company's revenues. The company is planning to add 300 exclusive stores in the country by the end of the current fiscal. Of these, 70% are likely to be in tier-2 and tier-3 cities and the rest in tier-1 cities. It already has close to 1,000 exclusive stores in the country.
  
  The company had recently started its 100th exclusive store in Gujarat. "Our strategy is to reach as close as possible to the customers," said Amar Babu, MD of Lenovo India. Laptops constitute 65% of its sales, while desk tops and All-In-One constitute over 30% of sales. The recently launched ultrabooks, netbooks and tablets constitutes the rest.
  
  The company has a manufacturing facility at Pondicherry with an installed capacity of 3 million units per annum. It has market share of 32% in enterprise segment, 12% in consumer segment and 7% in SMB segment.