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Other Indian IT firms may follow Satyam to market

The robust investor demand for the American Depository Shares offered by Satyam Computer Services could embolden other Indian IT companies to now proceed with delayed offerings of their own.

Indian tech companies planning to raise money overseas are HCL Technologies, which has Indian government permission to raise up to $500 million, and Mason Global, which is planning to go for a $40 million issue.

India's largest software company -- unlisted Tata Consultancy Services -- is also said to be considering listing domestically, overseas or both.

"It's particularly heartening to see blue-chip Indian companies be able to raise money from the global capital markets and receive a terrific response," said Amit Chandra, executive vice president with Merrill Lynch in Bombay.

"The response to this offering was incredible."

That response prompted interest on Wednesday in whether other Indian IT companies would soon follow suit.

After deferring foreign listing plans due to the plunge in technology stocks which began early last year, will other Indian IT companies now be enticed by the rally in US tech stocks and Satyam's successful listing to proceed with share offerings of their own aimed at foreign investors?

The tech-laced Nasdaq composite has risen 27.26 per cent in little over a month.

SATYAM'S SUCCESS

Satyam Computer Services, India's fourth largest IT services provider, said on Tuesday it raised $140.8 million by selling 14.5 million American Depository Shares.

The issue was oversubscribed more than seven times by institutional investors, and retail demand amounted to a further $200 million-$250 million, the issue's underwriter DPS Merrill Lynch said. Satyam's ADSs later Tuesday made a very strong debut on the New York Stock Exchange, closing at $11.80, up 21.5 per cent from the issue price.

Satyam initially filed to offer just 12.5 million ADS and an additional 1.875 million if demand warranted. It eventually sold 14.5 million ADS to meet the strong demand, and retained the right to sell a further 15 per cent.

Headquartered in the southern city of Hyderabad, an emerging technology center, Satyam provides software services to more than 300 clients, including General Electric Co, Sony Corp and Ford Motor Co.

Indian technology stocks rose widely on Wednesday in response to Satyam's NYSE debut.

Satyam's shares surged as much as 7.36 per cent to a high of Rs 245 before succumbing to profit-taking to close at Rs 229.75, up just 0.7 per cent on the day.

The Bombay Stock Exchange IT index gained 0.3 per cent.

IMPROVING VISIBILITY

Analysts said the immediate impact of the attention given to Satyam's bullish debut would be to boost the international visibility of that company, and Indian IT companies by association.

"A US listing really helps in improving the brand recall," said Chetan Shah, analyst with DBS Securities.

Satyam joins premier Indian companies like Infosys Technologies and Wipro, which had previously listed on US markets.

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