By IANS,
Mumbai : Shares of Tech Mahindra, the IT arm of automobile major Mahindra and Mahindra shot up over 12 percent Monday after Satyam’s board announced it had emerged as the highest bidder to take over a strategic 31 percent stake in Satyam.
Tech Mahindra’s bid would infuse Rs.1,756 crore ($351 million) into Satyam’s equity base.
At the Bombay Stock Exchange, shares of Tech Mahindra soared 12.31 percent to close at Rs.359.45, after having risen almost 25 percent to touch an intra-day high of Rs.400.
“These are immediate reactions as seen after most merger and acquisitions, but one should remember that markets discount all news very fast,” said Jagannadham Thunuguntla, equity head at stock brokerage SMC Capitals.
“Tech Mahindra will not gain much in the future because of this event,” added Thunuguntla.
Earlier in the day, Satyam scrip jumped about 16.43 percent to touch an intra-day high of Rs.54.90 but slipped as the day progressed to settle a modest 3.61 percent above its last closing figure at Rs.48.85.
“Satyam’s future depends on what Tech Mahindra chooses to do with it, keep it as a separate entity or merge it with itself,” said Thunuguntla.
India’s fourth largest software exporter Satyam Computer Monday said Tech Mahindra had emerged the highest bidder for its controlling stake, outbidding other two contenders – Larsen and Toubro and a consortium comprising Cognizant and Wilbur Ross.
The scam at Satyam, which came into light in January had seen its scrip plummet from a 52-week high of Rs.544 to a low of Rs.11.50 after its founder B. Ramalinga Raju shocked India Inc by admitting to the massive financial fraud of Rs.7,800 crore (Rs.78 billion).
“The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the company in its progress towards stabilisation and growth,” said Kiran Karnik, chairman of Satyam’s reconstituted board.
“We hope this will infuse greater confidence and comfort amongst customers, who continue to be happy with Satyam’s excellent service delivery. This event ought to dispel the anxiety of all stakeholders as it repositions the company’s commitment to revival and good governance.”