But a good reason Satyam is a good fit for the company is what Vineet Nayyar, vice-chairman and CEO of Tech Mahindra calls “complete complementarity”. Nayyar said not a single customer is common to the two companies.

Besides, close to 75 per cent of Tech Mahindra’s revenues are in pounds or Euros, whereas 75 per cent of Satyam’s revenues are in dollars.

Tech Mahindra, which provides information technology services to the telecom industry, has less than half the workforce of Satyam. More than half of the company’s business is serving one client, British Telecom, which owns a minority stake in Tech Mahindra. The deal would bring Tech Mahindra business in new industries from manufacturing to financial services.

Satyam has a land bank of 450 acres, of which 50 per cent is leasehold property. The two properties owned by the company – Satyam Infocity campus and Satyam Technology Centre campus in Hyderabad — have been valued at Rs 1,700 crore. The company has also been sanctioned Rs 600 crore bank loans against security of these two properties.

Satyam director Deepak Parekh who stayed out of the evaluation of technical bids because he sits on the board of Mahindra Group flagship Mahindra & Mahindra, confirmed that Tech Mahindra was at liberty to bring in another investor but would not be allowed to strip Satyam’s assets.

Tech Mahindra was advised by Kotak Mahindra Bank and UBS AG and BMR Advisors.

THE NEW STAKES
Top 5 IT cos by market cap
Company; Market cap; Employees
Infosys Technologies; Rs 80,716 cr; 1,05,000
TCS; Rs 57,904 cr; 1,30,343
Wipro; Rs 39,382 cr; 96,965
Tech Mahindra*; Rs 10,039 cr, 73,429*
HCL Tech; Rs 8,569 cr; 52,957

* including Satyam Computer market cap + 48,000 Satyam employees.
Note: Once the deal fructifies, Tech Mahindra, with a combined market cap of Rs 10,039 crore, is expected to rank fourth among IT companies from its current Nasscom ranking of six. The company has agreed to acquire 302.76 million shares of Satyam Computer — representing 31 per cent of the company's share capital. This means Satyam's equity capital will increase to 976.64 million shares from the current 673.88 million shares. Tech Mahindra will acquire these shares at a price of Rs 58 per share, which means Satyam's market capitalisation will be Rs 5,664 crore. The current market cap of Tech Mahindra is at Rs 4,375 crore so the total market cap, including that of Satyam Computer will be Rs 10,039 crore.