Satyam, Maytas scrips take a beating (Second Lead)December 17th, 2008 - 8:39 pm ICT by IANS
Mumbai, Dec 17 (IANS) Over 30 million shares of Satyam Computers changed hands Wednesday with the stock taking a pounding on the Indian bourses after the company’s failed bid to acquire Maytas Infra and Maytas Properties, infrastructure companies promoted by family members of Satyam chairman B. Ramalinga Raju.Satyam was the biggest loser on the Sensex shedding over 30 percent or Rs.68.45 to close at Rs.158.05.
The Maytas scrip, which was trading above the Rs.500-level since last week, fell 20 percent Wednesday to close at Rs.388.25.
“Promoters showing such disregard for ethics and corporate governance could tarnish the reputation of family-owned businesses in India. A lot of foreign institutional investors (FIIs) will be wary of investing in such companies and we already saw a lot of FIIs exiting the stock,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
Satyam planned to buy 31 percent in Maytas Infra from the promoters at Rs.475 a share and make an open offer for an additional 20 percent stake at Rs.525 per share.
It also planned to buy out Maytas Properties, spending $1.6 billion on the deal.
“The news has left a bad taste in the mouth, even though Satyam withdrew its offer. It reminds one of the times when promoters used to take investors on a jolly good ride. Corporates should be more responsible while dealing with such issues as it gives wrong signals to FIIs,” added Thunuguntla.
Some analysts have also predicted further fall in Maytas shares when trading resumes Thursday.