Satyam is no more; to live on as part of Tech Mahindra
New Delhi: Once a darling of the Indian IT sector and the stock market, the scam-hit erstwhile Satyam has formally ceased to exist as an individual entity by formally merging with Tech Mahindra.
Its journey saw a fraud bringing down the company's valuation by over 95 per cent within weeks, while a subsequent revival brought in an over 10-fold surge from the dumps.
Still, it is the remains of this once scam-hit company on which its saviour Tech Mahindra will bank upon significantly to move up the ladders of the Indian IT sector charts, say industry experts.
After debuting on the stock market in 1995, Satyam soon went on to become one of the country's top five IT companies and its share price was trading Rs 250 level in late 2008.
It came to be known by January 2009 that Satyam (a Sanskrit word that means truth) was home to India's biggest ever corporate scam, admitted to by its own founder and then Chairman B Ramalinga Raju, and the scandal broke the company's share price to as low as Rs 11.50.
A quick revival, however, followed with its takeover by Tech Mahindra through a government-monitored auction process and its name was changed to Mahindra Satyam.
Tech Mahindra on Friday announced the completion of allocation of its shares to the shareholders of Satyam Computer Services, raising the issued capital of the firm from 129 million shares to 232 million.
Many changes have come through under Mahindras and the group finally decided to amalgamate the two IT companies under its fold. Shares of Mahindra Satyam are no longer traded on the bourses.
They last traded at a level close to Rs 120 a piece and the value of each erstwhile Satyamshare is now equivalent to about Rs 130 a piece, taking into account Tech Mahindra's current share price of Rs 1,120.
As per the merger ratio, two Tech Mahindra shares have been given for every 17 shares held by Satyam investors. Experts say it made sense for the new owner to drop the Satyam brand name from the business, given its infamous past.
CapitalVia Global Research Head of Research Vivek Gupta said: "The good thing to cheer for the investors is that now they own a stake in the company which is much more clean in all the aspects and is amongst the top-five IT companies."
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