Tech Mahindra raises Rs 600 cr from NCDs

Tech Mahindra has raised Rs 600 crore from non-convertible debentures (NCDs), the company stated in a filing to the Bombay Stock Exchange (BSE) today. The Mumbai-headquartered IT service provider has raised the money to pay for the acquisition of Satyam Computer Services.

Tech Mahindra emerged as the highest bidder for Satyam in the recent auction, ahead of Larsen & Toubro and WL Ross & Co. On April 16, the Company Law Board gave its clearance for Tech Mahindra to acquire Satyam.

To complete the acquisition, the company has to pay Rs 1,756 crore before April 21 to acquire 31 per cent stake in Satyam. Moreover, the company also has to deposit the remaining cash (around Rs 1,144 crore) for the 20 per cent open offer in an escrow account.

Tech Mahindra, thus, has to raise a total of around Rs 2,900 crore for a majority (51 per cent) stake in Satyam. It had earlier raised Rs 275 crore from the sale of one-year commercial paper, primarily to mutual funds. It is understood that this issue has been fully lapped up by Reliance Mutual Funds. Life Insurance Corporation, Birla Sun Life Insurance and Kotak Life Insurance are among the eight entities that will subscribe to the non-convertible debentures and commercial paper.

The company is also in talks with banks to mobilise bridge loans worth Rs 1,000 crore. Another Rs 1,000 crore will come from the internal accruals of Tech Mahindra. The company had a net worth of Rs 1,753 crore at the end of December 2008.