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Satyam may sell 2.175 million more ADS

Satyam Computer Services may raise an additional $21.2 million by selling 2.175 million more American depositary shares, a senior official of issue underwriter DSP Merrill Lynch said.

Satyam, headquartered in Hyderabad, an emerging technology centre, said on Tuesday it had raised $140.8 million by selling 14.5 million ADS.

DSP Merrill said the issue was oversubscribed more than seven times by institutional investors, and retail demand amounted to a further $200 million-$250 million.

"We still have the right to exercise the additional 15 percent greenshoe option. If we do, it will take the amount raised to $162 million," DSP Merrill executive vice-president Amit Chandra said.

"That decision we will take depending on how the stock trades for the next week or two."

Satyam initially filed to offer 12.5 million ADS and an additional 1.875 million if demand warranted. It in fact sold 14.5 million to meet the strong demand, yet retained the right to sell a further 15 per cent of the issued amount, Chandra said.

Satyam priced its American Depositary Shares at $9.71 each - at par with the price on Tuesday of the underlying equity in Indian markets.

One ADS is equivalent to two domestic shares, which closed at Rs 228.20 on Tuesday at the Bombay Stock Exchange.

The ADS made a strong debut on the New York Stock Exchange, closing at $11.80, up 21.5 per cent from the offer price.

That caused the domestic shares to surge 7.36 per cent to a high of Rs 245 in Wednesday trading in Bombay.

Satyam Computer Services is the sixth Indian infotech sector company to list in the United States.

Company chairman B Ramalinga Raju said $26 million of the money raised would be used to repay debt, $40 million to fund expansion and the balance for acquisitions.

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