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From Satyam to Mahindra

Satyam

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Satyam Computer Services Ltd

Founded in June 1987 as a private limited company byRamalinga Raju along with R Rama Raju

In June 1991, Satyam Computers got its first Fortune

500 Client and was recognized as a Public LimitedCompany

One of the leading global consulting and IT servicescompany that offered end-to-end IT solutions

The company employed over 50,000 IT professionalsacross development centers in 6 continents

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Satyam Clients

A total of 650+ Clients

185 of the top fortune 500

Companies

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Turbulence

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The White Knight - techMahindra

Genesis

Incorporated in 1986 as a joint venture of Mahindra Group & BT

IPO in 2006, rechristened to Tech Mahindra

Business

Comprehensive service offerings for TSPs, TEMs & ISVs

Consulting, Application Development & Management, Network

Services, Solution Integration, Product Engineering, Managed Services,

Remote Infrastructure Management and BPO.

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Leader in Telecom offshoring

Ranks 5th among the Top 20 IT Software and Service exporters in India (excluding BPO revenues)

Stands 11th in the IT-BPO Employers category.

Global presence

Operations in more than 25 countries

Global presence with 16 sales offices & 13 delivery centers

Customer profile

Clients include 11 Fortune Global 500 companies (5 US)

Customers include 12 of Top 20 wireless TSPs & Top 5 TEMs

Major clients

BT, Cisco, Alcatel Lucent, Microsoft, Motorola, O2, Qwest, StarHub,

TNZ, Hutchison, Unisys, Vodafone, BSNL, Airtel, MTN, Etisalat, Zain, TMobile,

NSN, Cox, Telus, Huawei.

Employees

Around 33,000+ professionals across the globe.

The White Knight - techMahindra

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Strategic intent

Engineer the groups entry into the big league

of Indias IT sector joining the ranks of Tata

Consultancy Services, Infosys and Wipro

Diversification and derisking of business

No overlap in businesses

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The Big Confession

Confession of fraudulent accounts

Balance sheet (as on the 30th of September,

2008) reflected: Inflated figures for cash and bank balances by

361 crores

Accrued interest of Rs 376 crore which was non-

existent

Understated liability and overstated debtors

position.

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Turbulence

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The Aftermaths

Satyam stock price falls to 39.95 from 178.95

The New York Stock Exchange halted trading inSatyam stock from January 7, 2009.

Indias National Stock Exchange announcedthat it will remove Satyam from its Nifty 50-share index from January 12, 2009.

More than 12 law suits filed in US court Auditing firm PriceWaterHouseCoopers came

under scrutiny

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Corporate Governance??

September 2008 - Golden Peacock award for

Excellence in Corporate Governance

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Bidding process

6th Mar, 09 Approval From SEBI .

9th

-12th

Mar, 09 Registration for Bidding.

Criteria - min Rs. 1500 crores

No minimum Floor price required.

Lock-in period 3 yrs.

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Bidding Process(cont.)

Investor to get 31% fresh Equity shares from

Satyam .

Additional 20% from Public Offer.

Open Offer Price = Bid Price.

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Bidders involved

L & T Infotech@ Rs.45.90 per share

Wilbur L Ross & Co @ Rs. 20 per share

Tech Mahindra @ Rs. 58.90 per share

Cognizant & Spice Corp.

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Tech Mahindra wins Satyam Bid.

Paid Rs. 1756 crores for 31% stake .

Additional 20% for Rs.1129 crores.

FUNDING-- Raised Rs. 550 crores by issuing Convertible

Debuntures.

-- Borrowed Rs. 1450 crores @ 10% rate.

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Post-acquisition scenario & valuations

CHALLENGES

To rebuild the brand image

Issues related to governance( litigation),

Retaining customers,

Reduce insecurity among employees,

Downsizing .

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Effect On Tech Mahindra

Net borrowings of Rs 2,380 crores

paid Rs 57.1 crores as interest for just over two months onits borrowings that have a tenure of one to five years.

Revenues increased to Rs 1,113 crores by 5.8% from Rs

1,051 crores in the last quarter of 2009 . Tech Mahindra reported a net profit of Rs 131.6 crores in

the first quarter ending June 30, 2009 as against Rs 230.4crores , down by 42.8% in the last quarter.

The drop in net profit was largely due to interest paid and

forex loss of Rs 26.1 crores due to currency fluctuations.