Satyam shares pull back on takeover talk

MUMBAI: Satyam Computer shares plunged as much as 18.3 per cent to a five-year low of Rs 114.65 after it was barred from business with the World Bank for eight years, dealing another setback for the No 4 Indian outsourcer following a botched move into the construction industry. However by close, the stock, which had fallen 13.6 per cent on Tuesday, clawed back to limit losses to 3.9 per cent at Rs 134.95 as some investors termed the loss “excessive” after the stock fell nearly 50 per cent in just six trading sessions.

Speculation was also rife that the company could soon come under a takeover move as the stock valuation is now considered very cheap. “The promoter stake is low at around 8-9 per cent. It’s easy for any acquirer with deep pockets to mount a takeover of the IT company. Given its weak reputation, I don’t think other shareholders will object,” said BSE dealer Pawan Dharnidharka.

Mutual funds, insurance companies and FIIs together hold around 61.5 per cent stake in the company. As per the current Sebi guidelines, an acquirer will have to purchase 15 per cent before making an open offer for 20 per cent from shareholders. Who would be interested in Satyam? “It can be a foreign company also,” said a dealer.

Satyam has fallen 41 per cent in the last one week while Maytas Infra has crashed over 60 per cent to Rs 181.25 in a week. Market capitalisation of Satyam has fallen Rs 6,000 crore and Maytas Infra by Rs 1,800 crore, leading to a total loss of Rs 7,800 crore for their shareholders.

There was no Christmas cheer on Dalal Street on Wednesday. Stocks skidded for a third day, falling 1.2 per cent on Wednesday to their lowest close in more than two weeks, as investors braced for poor quarterly earnings due next month. The main 30-share BSE Sensex shed 118.03 points to 9,568.72, its lowest close since December 8. The market, which is closed on Thursday for Christmas, has lost 5.3 per cent this week after rising 4.2 per cent last week.