Tech Mahindra rallies 5% after merger announcement

Tech Mahindra rallied 5% to Rs 680 after the company announced amalgamation of Satyam Computer Services (Mahindra Satyam) with itself in the ratio of 2:17, to consolidate the information technology / software and related businesses and to form a single entity providing services in this sector.

“The company to issue its shares to the shareholders of Mahindra Satyam as on the Record Date based on the swap ratio of two (2) fully paid up equity shares of Rs 10 each of the Tech Mahindra for every seventeen (17) fully paid up equity shares of Rs 2 each of Mahindra Satyam," Tech Mahindra said in a filing to the stock exchanges.

“No shares of the company will be issued in respect of Venturbay Consultants Private Limited, C&S System Technologies Private Limited, CanvasM Technologies Limited and Mahindra Logisoft Business Solutions Limited as they are wholly owned subsidiaries of the Mahindra Satyam," it added.

As many as 1.5 million shares have changed hands on the Tech Mahindra counter so far, against an average sub one million shares that were traded daily in past two weeks on the NSE and BSE.

Mahindra Satyam, on the other hands, is currently trading marginally higher at Rs 74.40, erases its early over 3% gain after the announcements. A combined 12.26 million shares have changed hands on the counter on both the exchanges.