New Delhi: Ready to list L&T’s ‘second baby’ in the stock market with an IPO of its Infotech division, the group’s executive chairman A. M. Naik says it was nothing but ‘bad luck’ that it could not acquire the erstwhile Satyam Computer despite being early to accumulate the shares.
Satyam was eventually acquired by Mahindra Group in a government-initiated auction after a massive accounting fraud came to light in January 2009 at the then fourth largest IT firm of the country. L&T was another major group interested in acquiring Satyam at that time.
Soon after Satyam’s founder and then chairman Ramalinga Raju made public years of over-stating of various financial parameters, the company’s shares also went into a freefall, prompting L&T to accumulate shares at lower levels.
Within minutes of Raju’s disclosure becoming public on January 7, 2009, Satyam share price fell to as low as Rs 6.30 amid huge sell-off by panicky investors, which was more than Rs 500 below the peak price of about Rs 525 scaled less than a year ago in May 2008. Recalling the Satyam saga and L&T’s keen interest in acquiring that company at that time, Naik said, “The real story is we were too early to get into Satyam. When Satyam price started crashing, we started buying. We started buying at Rs 210 or something. We bought at Rs 125 and our average price came to Rs 80 something.” Referring to the auction, Naik said L&T estimated that the price at which it would go will be around Rs 55-60 and it decided to quote.
