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DAY traders have taken charge of the Satyam Computer Services counter amid a positive turn of events in the company ahead of Tech Mahindra's open offer.
In the past three weeks, about 8% of the company's equity was transacted among traders who were seen flocking to the counter to take advantage of a sharp rally in the share price. From a recent low of Rs 44 recorded on May 14, the scrip has almost doubled to close at Rs 81 on Thursday.
With a nil or minimal response expected for the open offer, TechM now has the option of increasing its stake to 51% through the preferential offer but that's unlikely, given the additional outflow it would involve, said an IT analyst with a foreign brokerage.
"If the open offer does not go through, Tech Mahindra is more likely to raise its stake to a minimum of 40.1%. This would demand an additional capital outflow of Rs 928 crore," he said. TechM has already paid Rs 1,750 crore to acquire a 31% stake in Satyam through a fresh issue of shares. "After 26%, there is no strategic benefit in taking the stake to 40%. The only advantage is with a 40% stake is that no one can challenge their ownership," said another analyst who did not want to be quoted. The trading pattern in Satyam showed that a large number of shares was traded through bulk deals.
Market sources also attributed the Satyam rally to a revival of interest among large institutional investors after TechM acquired the ill-fated company. Adding to market sentiment, the scam-hit company announced better-than-expected numbers for the quarter ended December 2008. The upswing in the stock, however, has turned the prospects of the TechM's open offer uncertain, with the share price soaring well past the offer price of Rs 58 per share. The offer opens on Friday.
GOING LONG
In the past three weeks, nearly 8% of the shares were transacted among traders
TechM has the option of increasing its stake to 51% through the preferential offer
A large number of shares were traded through bulk deals
The stock upswing has turned the prospects of the TechM's open offer uncertain
In the past three weeks, about 8% of the company's equity was transacted among traders who were seen flocking to the counter to take advantage of a sharp rally in the share price. From a recent low of Rs 44 recorded on May 14, the scrip has almost doubled to close at Rs 81 on Thursday.
With a nil or minimal response expected for the open offer, TechM now has the option of increasing its stake to 51% through the preferential offer but that's unlikely, given the additional outflow it would involve, said an IT analyst with a foreign brokerage.
"If the open offer does not go through, Tech Mahindra is more likely to raise its stake to a minimum of 40.1%. This would demand an additional capital outflow of Rs 928 crore," he said. TechM has already paid Rs 1,750 crore to acquire a 31% stake in Satyam through a fresh issue of shares. "After 26%, there is no strategic benefit in taking the stake to 40%. The only advantage is with a 40% stake is that no one can challenge their ownership," said another analyst who did not want to be quoted. The trading pattern in Satyam showed that a large number of shares was traded through bulk deals.
Market sources also attributed the Satyam rally to a revival of interest among large institutional investors after TechM acquired the ill-fated company. Adding to market sentiment, the scam-hit company announced better-than-expected numbers for the quarter ended December 2008. The upswing in the stock, however, has turned the prospects of the TechM's open offer uncertain, with the share price soaring well past the offer price of Rs 58 per share. The offer opens on Friday.
GOING LONG
In the past three weeks, nearly 8% of the shares were transacted among traders
TechM has the option of increasing its stake to 51% through the preferential offer
A large number of shares were traded through bulk deals
The stock upswing has turned the prospects of the TechM's open offer uncertain
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