Satyam Plans $500-700m Adrs
The ICE major Satyam Computers Ltd is planning to raise around $500-700 million through an American depository receipt issue. Financial institutions led by the Industrial Development Bank of India (IDBI) had recently approved the Satyam Computers ADR proposal.
According to industry sources, the company is planning to hit the Nasdaq between August and September and the issue is expected to be lead-managed by the merchant banker DSP Merill Lynch, which had successfully managed Satyam Infoway's $125 million ADR issue last October.
Satyam Computers holds around 56 per cent in Satyam Infoway, known as Sify on Nasdaq.
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The company has already appointed PricewaterhouseCoopers as auditors for the company to follow the US Generally Accepted Accounting Practices.
However, when contacted in Singapore, Satyam Computers finance director V Srinivas declined to comment on the development.
The company has also decided to off load 3 per cent equity in Satyam Infoway to raise funds to clear its outstanding debt. Satyam Computers has around Rs 330 crore debt.
The decision to raise funds is part of the promoters' intention to make Satyam Computers a zero-debt company.
Satyam Computers is targeting a net profit of Rs 140 crore in March 31, 2000 on a turnover of Rs 750 crore. The net profit is expected to touch Rs 160 crore in March 2002 on a turnover of Rs 900 crore.
While 65 per cent of the company's revenue comes from offshore software development, the balance is accounted for by domestic onsite operations. Around 75 per cent of the company's offshore development revenues accrue from its exports to the US.
The company has about seven offsite development centres and its clientele includes around 60 corporates from the US, Germany and Japan.
While the promoters, including Ramalinga Raju and his brothers and relatives hold 33 per cent equity in the company, non-resident Indians hold 30 per cent, mutual funds 15 per cent and the investing public 22 per cent.
Meanwhile, the Satyam brand value has been estimated at Rs 1,516.72 crore ($347.79 million) against Rs 517.82 crore, according to the company's annual report for 1999-2000.
The economic value added of Satyam Computers more than doubled to Rs 83.32 crore for the year-ended March 31, 2000 against Rs 40.15 crore for the year ended March 31,1999.