JOIN USFollowing a sharp rally seen in its share price last week on the back of disclosure about its profits, Satyam’s market capitalisation has grown to about Rs 7,800 crore, placing it among the 100 most-valued firms in the country.
The company had moved out of this league soon after the disclosure about the fraud on January 7 — the day when its founder and then Chairman B Ramalinga Raju admitted to multi- year financial fraud at the company.
Two days later on January 9 — when the company’s share price and market valuation hit their all-time lows at Rs 6.30 a share and about Rs 600 crore, respectively — Satyam did not figure even among the 300 most-valued firms.
Most-valued firm
In contrast, Satyam was placed as the country’s 34th most-valued firm with a market capitalisation of over Rs 15,000 crore on December 16 — just before Raju unsuccessfully tried to acquire two firms promoted by his family in his bid to conceal the financial fraud at the company. While it is still to recover about half of its lost value due to the scam, the shares have grown back to Rs 80-level -- representing a 13-times surged from its low.
Between the announcement of aborted attempt to acquire Maytas Infra and Maytas Properties and the disclosure letter about the fraud on January 7, the company lost more than 80 per cent in its market value, while its slide continued further till it reached an all-time low of about Rs 6.30 per share on January 9.
Prior to its fall, Satyam was the country’s fourth most-valued IT firm after Infosys, TCS and Wipro, but had become one of the least valued on January 9. Satyam now ranks at the seventh position among IT companies after TCS, Infosys, Wipro, HCL Tech, Oracle and Tech Mahindra and at the 97th spot among the top 100 companies.
Tech Mahindra’s market valuation has also increased significantly to around Rs 8,799 crore since it won the bid for acquiring controlling stake in Satyam.
Tech Mahindra’s market capitalisation has increased by as much as Rs 4,420 crore, since April 13, while its shares have more than doubled to Rs 722 on June 12 as compared to Rs 359.45 on April 13. Last week, Satyam shares got a boost from its results for October-December 2008 with Rs 181 crore profit in the quarter which points to a promise of a strong comeback under new owner Mahindras.
However, analysts believe entering into Satyam stock at this moment may be a high risk move as still uncertainties prevail on the future of the two entities.
“Uncertainty about their future make both Satyam and Tech Mahindra a high risk investment, though Tech Mahindra seems relatively better as it may gain considerably with its increased size,” an analyst added.