Mumbai: Shares of Patni Computer Systems have lost 135 of their value in the past six months, underperforming the IT index, as the firm has been growing at a much slower rate than its peers.

Patni’s promoters recently sold a majority stake in the company to software firm iGate, backed by private equity firm Apax Partners, for 503.50 a share, bringing to close a three year hunt.

While the deal could help Patni secure larger contracts, the integration remains a challenge as iGate, which reported fourth-quarter revenue of $81 million, attempts to merge with a company nearly double in revenue.

Among the analysts who follow the stock, 10 rate Patni “buy" or “strong buy," 10 rate it “hold" and eight have a “sell" or “strong sell" rating, according to Starmine.

Are the prospects of a bigger company reason enough to hold on to Patni’s stock or is the integration challenge a cue to sell?

Integration could be painful

“Pricing of the deal was a dampener. Everybody was expecting the deal to happen at around 525-550," said Rajiv Mehta, assistant vice president, reseach at IIFL.

If there is management attrition at Patni, then integration will be painful and will delay the process, Mehta added.

Analysts were concerned on the cash position in Patni being taken over to repay iGate’s debt.

“iGate is heavily leveraged. Patni is sitting on cash. Now, there could be loans and advances that could go to iGate books once the transaction gets completed," an analyst at a brokerage with a “sell" rating on the stock, said.

“The comfort in the cash position I had as a Patni shareholder is not there anymore," he added.

No overhang, leadership matters

“The talk of selling the promoters’ stake was on for almost three years now and clients had got very, very jittery," Elara Capital analyst Pralay Das said.

Clients are cagey about giving large $50-$100 million contracts when they don’t have clarity on who is going to own the company eventually, he added.

“So now, that particular overhang is out," Das, who has a “buy" on the stock, said.

Analysts bullish on the stock believe the challenge of integrating both the companies can be pulled off with ease with the leadership of iGate chief executive Phaneesh Murthy.

“The positive is that you have the leadership of Phaneesh Murthy, who has helped Infosys from pretty much nothing to a million dollar company in, like, ten years at the firm," an analyst, who rates Patni “outperformer," said.