Mahindra grabs Satyam booty

 

 

The seesaw over the ownership of Satyam finally came to an end last week with Tech Mahindra, an IT major, acquring the company, along with its legal and other liabilities. In fact, Tech Mahindra’s latest acquisition of the now -disgraced Satyam has made the firm the fourth largest IT major in the country. “Anand Mahindra’s diversification strategy has undoubtedly taken the M&M Group to a different platform. He has always been very accurate in understanding the targeted consumer segment,” asserts N Wadhwa, MD, SKI Capital Ltd.

Tech Mahindra’s primary source of revenue is providing IT solutions to some of the top notch global companies, with British Telecom being its single largest client.

Tech Mahindra’s rivals that fell on the way include Larsen & Toubro and Wilbur Ross. By outbidding them, Tech Mahindra has taken over Satyam’s 46,000-strong work force and Rs 450 crore in realty assets. But recently a number of Satyam employees have been shitfting to rivals Infosys and Wipro, making it tough for Tech Mahindra to win back lost assets.

The total cost of the acquisition is estimated to be Rs 2,889 crore. The company is raising Rs 600 crore through bonds maturing between four to five years, and Rs 700 crore from internal sources. The mother company’s banking arm, Kotak Mahindra, is contacting mutual funds, insurance companies and financial institutions. It has to take this step because laws of the land do not allow banks to finance takeovers.

Apart from tourism and IT, this magnate has also made a name in the retail, financial services and logistics sectors.

But it’s not only the diversifications which driving the growth of the group; Anand Mahindra has equally focused on the automobile business, the core strength of the group, taking the company to the top positions in the multi-utility vehicle segment. Mahindras are sure going places.