Satyam Computer Services hammered

Satyam Computer Services slumped 30% to Rs 156 after its American depository receipt plunged overnight as investors reacted negatively to its plan to buy two related companies.
In a dramatic turn of events, Satyam called off the deal which it had announced after trading hours in India on Tuesday, 16 December 2008. Satyam announced the decision to call off the deal before trading hours in India today, 17 December 2008.
Meanwhile, the BSE Sensex was down 115.55 points, or 1.16%, to 9861.73.
On BSE, 1 crore shares were traded in the counter. The scrip had an average daily volume of 9.15 lakh shares in the past one quarter.
The stock hit an intraday low Rs 156.85, also its 52-week low. It hit an intraday high of Rs 200 so far during the day. The stock had a 52-week high of Rs 544 on 30 May 2008.
The stock had underperformed the market over the past one month till 16 December 2008, declining 13.43% as compared to the Sensex's 6.30% rise. It had also underperformed the market in the past one quarter, falling 36.44% as compared to the Sensex's fall of 26.20%.
India's fourth largest software exporter by sales has an equity capital of Rs 134.77 crore. Face value per share is Rs 2.
The current price of Rs 169 discounts its Q2 September 2008 annualised EPS of Rs 35.48, by a PE multiple of 4.76.
Satyam Computer Services scrapped a $1.6 billion acquisition of companies connected to its chairman after the plan angered investors and drove down the software firm's American depository receipt a record 55%. The American depository receipt or ADR of Satyam Computer Services, which closed down $6.85, or 55%, at $5.70 on the New York Stock Exchange, jumped 50% in after-hours trading to $8.89. Even after the evening rally they were still down 28% from Monday's (15 December 2008) close of $12.30.
Satyam had announced that it will acquire 100% in unlisted Maytas Properties for $1.3 billion and 51% of construction firm Maytas Infra for $300 million. Satyam founder and Chairman B. Ramalinga Raju and other insiders hold 36% in Maytas Infra and 35% in Maytas Properties.
Satyam had planned to fund 75% of the acquisition with cash and the rest by selling debt. Satyam planned to acquire 31% in Maytas Infra from its promoters, or company insiders, at a price of Rs 475 a share. Satyam also planned to make an open offer for an additional 20% at a price of Rs 525 a share.

As per reports, the acquisitions made little sense at a time when technology outsourcing companies are preserving cash to cope with slowing outsourcing business.
Maytas Properties is into urban infrastructure development whereas Maytas Infra is into infrastructure construction and asset development.
Ramalinga Raju originally promoted the deal by saying it would de-risk Satyam's core business in IT services.

Satyam Computer Services' net profit rose 3.73% to Rs 597.43 crore on 6.87% increase in net sales to Rs 2700.52 crore in Q2 September 2008 over Q1 June 2008.
Satyam Computer Services is a global business and information technology services company. It delivers consulting, systems integration and outsourcing solutions to clients.