After the losing the race to acquire erstwhile Satyam Computer,Larsen & Toubro (L&T) has sought permission from market regulators to sell its stake in outsourcer Mahindra Satyam. Currently,L&T holds around 8 per cent stake in Mahindra Satyam. At the current Satyam share price of Rs 112.95 on Wednesday on the Bombay Stock Exchange (BSE),the holding is worth around Rs 900 crore. L&T had invested about Rs 640 crore for around 12.04 per cent stake in Satyam Computer Services at an average price of Rs 79 per share before the takeover of the company by Tech Mahindra in April. Tech Mahindra bought 31 per cent stake in Satyam for around Rs 1,756 crore,and launched an open offer for a further 20 per cent in the company. However,the open offer got poor response from shareholders,following which Satyam went for a preferential allotment of shares to tech Mahindra,widening its equity base. During the bidding process for Satyam,all the bidders,including L&T,had to agree to a six-month lock-in period for their investments made in the company. L&T can thus exit from Mahindra Satyam only after October 14. Satyam,which was once Indias No 4 outsourcing firm,had not reported audited results beyond the September quarter after founder Ramalinga Raju stated that the company's profits had been overstated for years. In June,Satyam released financial figures for the first time since the revelation of the fraud,ahead of the launch of an open offer by Tech Mahindra. However,L&T is not planning to sell the stake immediately if the restriction was lifted,and will consider various issues including market conditions before taking the decision of selling their stake. L&T has sought the permission as an enabling arrangement and has not set a timeframe for selling its holding. L&T had picked up a 3.95 per cent stake in Satyam in December through L&T Capital,a subsidiary of L&T,a little before Satyams founder-chairman,Ramalinga Raju,made the disclosure of fraud in the company. Later in January L&T bought another eight per cent stake from the secondary market. After Ramalinga Rajus disclosures on January 7,the shares of Satyam plunged to a low of Rs 6.30 per share on the NSE and Rs 11.50 per share on the BSE on January 9,2009. On Wednesday,Satyams shares closed at Rs 112.95,up by 5.41 per cent on the Bombay Stock Exchange. L&T shares,on the other hand,closed at Rs 1,514.80,down by 0.31 per cent on the BSE. For L&T,the shareholding in Mahindra Satyam is nothing but a financial investment and it does not make any sense for them to hold on to it. As the share prices of Satyam is going up it makes more sense that L&T will now think of selling their stake and book some profit in the process. Itll bring in cash for them as well, commented Harit Shah,analyst (IT& telecom),Angel Broking.
