“Satyam”- not Shivam nor Sundaram.

Posted on: March 6, 2009

Satyam- a former construction company turned a Indian software giant, 4th largest IT exporter from India now at trouble. It is seeing a very tough time recently when market people did not accept Satyam’s acquisition of Maytas Infrastructure and Maytas Properties where both companies are in the hold of family of Satyam’s chairman B Ramalinga Raju. Satyam’s this deal disturbed the basic confidence of Indian investers. You can look at the chart given here and observe more than 40% loss in just 1 week where the prices of 24th Dec compared with 16th Dec, the day before the Maytas- Satyam deal saw the red eye of investers.
The company dropped the plan to buy the two firms within hours after investors reacted angrily. But it didn’t helped because it encountered another unfortunate moment- The World has barred Satyam, its top computer software services provider, from conducting any business with it for eight years. The WB has given the reasons “improper benefits to bank staff” and “lack of documentation on invoices” for taking this action. This again raised selling pressure of the Satyam shares. Even today (24 Dec) market drop and Satyam share fall are non comparable- Satyam was down 14.6 percent at 119.85 rupees at the time Mumbai market was down 0.9 percent.

Apart from these stories there are also strong reasons that Satyam’s further fall that may not be able to acquire in this strange economic situation. Satyam clients General Electric, Nestle and Qantas Airways, cut its sales forecast in October. Satyam became a live example of bad corporate governance. There is no hope of Satyam becoming Shivam(auspiciousness-favorable quality of indicating successful) and Sundaram(beauty).


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