MUMBAI: The successful bid by Tech Mahindra to acquire scam-tainted Satyam Computers has started a new trading strategy in the bourses. While Satyam most brokers ET spoke to, are wary of taking positional calls on either companies, the trading idea is to buy Infosys and TCS if the sectoral view is positive or short Tech Mahindra if the outlook on IT is negative.
At 12.40 pm, Tech Mahindra was trading 13.7% higher at Rs 364 while Satyam fared 7% higher at Rs 50.45. However the value was much lower than Tech Mahindra’s 52-week high of Rs 990 in May 2008.
Brokers said both counters witnessed sizeable trading volumes. “We’re not sure why the two counters are rallying so high. Positional calls of both stocks can only be taken post Infosys results,” said Networth Stock Broking research head Deepak Sawhney. “If Infosys comes out with good fiscal fourth quarter numbers and a fairly good sectoral outlook, then we’d be able to say Tech Mahindra’s acquisition of Satyam will benefit both the companies. If Q4 numbers are bad and outlook negative, the Satyam acquisition will weigh heavy on Tech Mahindra,” Mr Sawhney added.
IT services provider Tech Mahindra is the new owner of Satyam Computer Services. The company bid the highest at Rs 58 per share,pipping rivals engineering firm Larsen & Toubro and billionaire investor Wilbur Ross to the post.
According to sources who requested anonymity, engineering firm L&T made an offer of around Rs 49 for each Satyam share.
Tech Mahindra will have to pay Rs 1,757 crore to buy a 31% stake in Satyam Computer Services. The IT co will have a market cap of Rs 5,666 crore on expanded equity. Tech Mahindra will have to pay a total of Rs 2890 crore for 51% stake in Satyam.
The acquisition will help the company, an arm of the Mahindra & Mahindra Group, to diversify into new areas instead of just depending on the telecom sector.
The Satyam acquisition will help Tech Mahindra diversify its software services business, and compete aggressively with bigger rivals such as TCS, IBM, Infosys and Wipro.
Satyam, which serves customers such as GE, GM and Ford will also help Tech Mahindra build a better portfolio of customers.
Satyam has a 46,600 strong work force, land assets of 450 crore, besides the order book position. Its liabilities include the legal liabilities arising out of the class action suits filed by shareholders in the US, besides any liability arising out of the tussle with UK based mobile payments services provider Upaid.
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