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Our Bureau

Mumbai, Dec. 29 IL&FS Trust Company Ltd — believed to be one of the institutions with whom the shares of the promoters of Satyam Computer Services were pledged — on Monday sold 44.1 lakh shares of the beleaguered IT firms in the open market at Rs 139.83 a share.

According to market sources, the promoters of Satyam had pledged a significant part of their holding in the company with IL&FS in lieu of loans obtained. And this was further validated by a communication sent by Satyam to the bourses on Monday stating that all shares held by SRSR Holding Pvt Ltd “were pledged with various institutional investors for over a period of time since September 2006”.

As on Septmeber 2008, Mr B. Ramalinga Raju, Founder and Chairman of Satyam Computer Services, and his family held 8.61 per cent stake in the Hyderabad-based company through SRSR Holdings, which is a family owned investment company. After the IL&FS sale of shares, the promoter holding in Satyam has come down substantially, with some unconfirmed reports indicating at 3.5 per cent

“It is possible that some of the lenders may exercise or may have exercised their option to liquidate such quantum of shares at their discretion to cover the margin shortfall. This would consequently dilute the promoters’ holding in the company,” Satyam informed the bourses.

According to news reports, the promoters had also pledged shares with other financial institutions such as GE Capital and Merrill Lynch. However, this could not be confirmed.

Though the identity of buyers of shares sold by IL&FS in Monday’s deal could not be ascertained, market sources indicate that two-three domestic mutual funds, including Reliance Mutual Fund, have picked up Satyam’s shares.

Existing public shareholders (holding more than 1 per cent of shares in Satyam) could also be interested in hiking their stake.

Aberdeen Asset Managers Ltd holds about 5.13 per cent stake in the country’s fourth largest software exporter through two investment vehicles. Other investors include Fidelity, ICICI Prudential, Lazard Asset Management, and LIC.

“In a situation like this, it is quite probable that several institutional shareholders of Satyam may gang up and push for a management change at Satyam,” said Mr N.V. Shah, Director, NVS Brokerage.

On Monday, the company shares were up by 9.41 per cent to close at Rs 148.25 on the Bombay Stock Exchange, where about 3.07 crore shares exchanged hands. Satyam ADR was up by 5.3 per cent to $8.35.

“The markets anticipate a hostile takeover for Satyam as a result of which there could be a complete overhaul of the current management team. This has contributed to renewed buying interest in this counter,” said Mr Shah.

More Stories on : Financial Institutions | Stocks | Software | Satyam Computer Services Ltd

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