IT major Tech Mahindra is looking to raise funds by selling 13.6 million shares to institutional investors. Tech Mahindra, which acquired fraud hit Satyam Computer Services (now Mahindra Satyam) in April this year said in its communique to the stock exchanges that it plans to raise fund through a private placement or Qualified Institutional Placement (QIP). It also said that Tech Mahindra and Mahindra Satyam will also merge at some time.
“It is logical and there are a lot of synergies. I am afraid I can’t give a time right now. It will be in the foreseeable future,” Vineet Nayyar, vice-chairman of both the companies, has been quoted saying at a news conference.
The company also announced C P Gurnani as new CEO and S Durgashankar as new CFO of Mahindra Satyam. While Gurnani was till now heading the global operations of Tech Mahindra, Durgashankar was Senior VP (M&A) at Mahindra & Mahindra.
By selling 13.6 million shares, Tech Mahindra could raise more than Rs 1,000 crore if one takes its closing price of Rs 747.45 yesterday. It would amount to a little more than 10% stake in the post-issued capital of the company.
Tech Mahindra has acquired a 31% stake in Satyam for Rs 1,756 crore ($351 million). The firm has now made an open offer for another 20% stake in the firm. The open offer, which started on June 12 and will close on July 1, has been made at a price of Rs 58 per share. It is
expected to cost Rs 1,154 crore.
But Satyam shares have spiked since then as the company reported profits $33.5 million for the December quarter. The shares have reached above Rs 80 and yesterday closed at Rs 73.2.
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