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After months of speculation and anticipation, Mahindra Satyam is all set to kick off the merger process with Tech Mahindra in June. The process is expected to take 8-10 months.
Though the management, including the group Chairman, Mr Anand Mahindra, and Mr Vineet Nayyar, Chairman of Mahindra Satyam, had talked about the ‘intent' for the merger, series of issues delayed the process.
“Management is keen to start this process. They are waiting for some regulatory approvals. We anticipate that this process will start in June. Intent has always been there. But one thing or the other has been pushing us back,” Mr C.P. Gurnani, Chief Executive Officer of Mahindra Satyam, told Business Line , on Thursday after taking part in celebrations to mark the second anniversary under the Mahindras.
Satyam was ranked fourth after TCS, Infosys, and Wipro before the scam broke out in 2009. It, however, fell from grace and a lot of confusion followed on its actual financial health. After restatement of accounts by the new management, it was found that its revenues were just $1.1 billion and lost its top-4 slot.
Post merger, the Mahindra Satyam-TechM duo could catapult back to the tier-I league with a combined turnover of about $2.12 billion. It still would be behind HCL. There would be a clear lead over MphasiS and Patni.
Operational metrics
“We have begun working together and started working together wherever possible legally. There is no overlap. Not one piece is to be discarded,” he said.
Talking on the key challenges, he said the company needed to get its operational metrics in tune with the industry. To do this, it would be working on two programmes. One is Margin Expansion Programme which will be based a lot on value engineering. The second programme was aimed at converting onsite-centric centres to global delivery centres.
He said the company would have 5,000 new positions this financial year as part of its ‘Resourcing and Retention' programme. “We will focus on mentoring and retention,” he said.
Replying to a query on relisting on New York Stock Exchange, he reasserted Mahindra Satyam's position that it was keen on becoming current according to US accounting standards. Mr Gurnani, however, had not given any time line.
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