The open offer price of Rs 58 a share by Tech Mahindra for acquiring a controlling stake in Satyam is far below the today's market price of Rs 80 on the Bombay Stock Exchange [ Images ].
With Satyam hitting the upper circuit for three straight trading sessions, marketmen feel Satyam shareholders may prefer not to tender their shares under the open offer as they would get better valuations in the open market.
"The open offer would not be fully subscribed as shareholders are getting better price in the market," Unicon Financial Intermediaries CEO G Nagpal said.
Tech Mahindra's Rs 1,154.66 crore (Rs 11.54 billion) open offer, which begins on Friday, would close on July 1, 2009.
However, analysts believe that even if under-subscribed, Tech Mahindra is unlikely to revise the offer price or make a preferential issue to hike its holding in Satyam.
"It is doubtful that the shareholders would tender their shares at this rate as the market is currently giving better returns than the price offered by Tech Mahindra. But shareholders should not expect any revision in the offer price," Rajesh Jain, vice-president, SMC Global said.
"Tech Mahindra already has management control in Satyam. They would prefer that the money deposited in the escrow account to be utilised in the company, rather than giving it to the shareholders," Nagpal said.
Indian conglomerate Mahindra and Mahindra's IT arm Tech Mahindra, which in April acquired 31 per cent stake in tainted Satyam for Rs 1,756 crore (Rs 11.56 billion), will begin accepting shares from public shareholders from tomorrow under its over Rs 1,154-crore open offer for additional 20 per cent stake.
Earlier on Tuesday, Satyam said it's December quarter standalone net profit stood at Rs 181 crore, while in the month of January and February the net profit was at Rs 4 crore (Rs 40 million) and Rs 52 crore (Rs 520 million), respectively.
Following the announcement, shares of Satyam has been on a rising spree and has surged 33 per cent in the past three trades.
"Institutional investors are buying in Satyam for the past 4-5 days. However, in the price range of Rs 80-85 there can be some selling pressure from L&T," Nagpal noted.
However, shares of Tech Mahindra dropped 1.40 per cent at Rs 773.90 on the BSE. The scrip has been on a gaining spree ever since it announced its open offer for Satyam on April 22 and has more then doubled since then.
"The scrip has seen a dream run since its acquisition of Satyam. It is only a logical correction as the overall sentiment in the broader market was down," Nagpal said.