Tuesday, April 14, 2009

Satyam changes call sign: Satyam is now Tech Mahindra

After months of uncertainty and daily rumours the verdict is finally out Tech Maindra is now the fourth largest IT company in the country after acquiring Satyam Computer Service Ltd. This is a huge relief for the employees of Satyam for the first time since January 7 when Ramalinga Raju broke the 7000 Crore scam after which he and his brother were arrested.

What it means for Satyam is that at one go it will have the much needed cash which it was starved off due to the fraud committed by its founder B Ramalinga Raju and his brother Rama Raju. For Tech Mahindra its huge step getting a well organised company with Fortune 500 clients at one go. Tech Mahindra a nobody in IT services till now has become the fourth largest Indian IT brand.

Satyam's diverse client base is a huge advantage for Tech Mahindra which the company is getting with acquisition. Till now TM was focused only on the UK market with British Telecom being one of its major clients. With Satyam in the kitty it gets access to the US markets where from the bulk of IT business comes to India. It can now boast of clients like ANZ, GM, Motorola among others.

Satyamites reacted to this acquisition with mixed feelings. While some rejoiced the fact that the period of uncertainty was over others were bit worried about their jobs as Tech Mahindra is known to have a huge bench strength of its own. Tech Mahindra's relative less grip and experience on the IT market is also a major worry for them as many. Some feel the masters here are less experienced than the company they acquired.

The markets did not accept the deal with open arms. Satyam share prices had risen in the first hour of trade on Monday and had rises by almost 8% in during the trading period but with the news of Tech Manidnra winning the bid the the prices went down. Experts believed L&T Infotech might have been a better master considering the brand value it enjoys over the Mahinda group.

All in all it is too early to say how the investors, clients and employees of both these companies will react to the situation and only time will say if this acquisition works for the betterment of the employees of Satyam and the brand of Tech Mahindra.

Also Read...
Why Satyam is still worth investment?


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