Raju's resignation may affect Maytas companies

The future of Maytas Infra and Maytas Properties, which Satyam had made an aborted attempt to acquire last month for $1.6 billion, is likely to be affected with Satyam's founder and Maytas Infra promoter B Ramalinga Raju's resignation on Wednesday.

While Raju and other insiders hold 36 per cent stake in Maytas Infra, his immediate family owns 35 per cent in Maytas Properties. “Maytas Infra is a public-listed, separate and independent company run by a strong professional management team. Developments at Satyam do not impact operations of Maytas Infra and it is business as usual,” a company spokesperson said. However, analysts said, the company is likely to face difficulties in sailing through the current crisis. For instance, the construction and infrastructure company requires around Rs 1,200 crore for meeting the requirements of the Rs 12,000-crore Hyderabad Metro Rail and other projects over the next two years. Now, mobilising funds could be difficult with doubts cropping up over the authenticity of the balance sheet of this company too.

Meanwhile, the negative implication of the Satyam fiasco is already evident. HMR Corporation Managing Director N V S Reddy, who earlier maintained that the Maytas-led consortium was well on course to achieve financial closure for the project, told Business Standard that the state government now "has to take a view on this".

Andhra Pradesh Chief Minister YS Rajasekhara Reddy, who announced a CB-CID probe into the financial wrongdoing of Satyam, has also asked the state chief secretary to examine the functioning of the two Maytas firms. Shares of Maytas Infra dipped 4.99 per cent on Wednesday to Rs 159.05, compared with the previous close of Rs 167.40 on the BSE.

Maytas Infra, which had raised Rs 327.45 crore through an initial public offering and was listed on stock exchanges in October 2007, currently has over Rs 11,000 crore orders on hand, to be executed in the next 30 to 36 months. It reported an expenditure of Rs 313.93 crore and a net profit of Rs 16.84 crore for the quarter ended September 30, 2008.

On the other hand, Maytas Properties, an unlisted company, reported a turnover of Rs 280 crore and a net profit of Rs 19.7 crore in 2007-08. Satyam intended to pay Rs 6,500 crore for this company with an estimated land bank of 6,800 acres.

"Maytas Properties is a separate and independent company run by a strong professional management team. Developments at Satyam do not impact operations of Maytas Properties," Chief Executive Officer K Thiagarjan told Business Standard.

The name Maytas is a mirror image of Satyam and Satyam's reflections are bound to be there. If not, Maytas Infra shares would not have tanked on the stock exchanges following the aborted acquisition deal.