Satyam nosedives in early trade, tanks 33%

Satyam nosedives in early trade, tanks 33%

Mumbai: Satyam Computer on Wednesday tanked as much as 33% and witnessed its 52-week-low level on bourses in early morning trade amid the company calling off its $1.6-billion deal to acquire two infrastructure businesses promoted by the IT major chief Ramalinga Raju’s son.

Satyam on Wednesday opened at Rs200, a fall of nearly 12% in the early trade on the Bombay Stock Exchange. The scrip lost further ground and tanked as much as 30.75% to touch an intra-day low of Rs156.85.

Similar trend was witnessed on the National Stock Exchange where the scrip opened on a weak note at Rs214.90, then dipped further to witness an intra-day low of Rs151, a fall of 33.35% from its previous closing price.

“By announcing such a deal, which was wiping off the entire cash in the balance sheet, the management has given a bad impression," Ashika Stock Brokers Research head Paras Bothra said.

The fall in the share price is more of a sentimental impact and the announced deal would have a lasting impression on the institutional investors, who would continue their sell-off in the short term, Bothra added.

Announcing the decision to call off the proposed acquisition of Maytas Properties and Maytas Infrastructure “in the light of the setback received from the investors community", Raju said, “We have been surprised by the market reaction to this decision even though we were quite positive about the merits of the acquisition.

“However, in deference to the views expressed by many investors, we have decided to call off these acquisitions."

At 10.39 am the scrip was trading at Rs168.75, down 25.50% on BSE and at the NSE the stock was quoted at Rs168.85, down 25.47%.