At current market price, its 6.9% stake is valued at Rs 900 crore.
Larsen & Toubro (L&T), India’s largest engineering company, has sought permission from the market regulator to sell its 6.9 per cent stake in Mahindra Satyam, which is currently valued at around Rs 900 crore.
L&T had lost the bid to acquire the scam-hit company, earlier known as Satyam Computers, to Tech Mahindra in April this year.
Under the conditions of the Satyam sale, bidders for the company are barred from selling stakes acquired prior to the bid for six months because they were given access to Satyam's financial information that was not public at the time. This means L&T can exit from Mahindra Satyam only after October 14 this year.
An L&T spokesperson, however, said the company was asking for relaxation of this condition since the information that was made available to the bidders is public now. “It would be an enabling feature. Whether we sell the stake immediately is a secondary issue,” he said.
L&T had acquired 4 per cent in Satyam in December last year for around Rs 400 crore. In January, Satyam founder Ramalinga Raju revealed that the company had reported inflated profits for many years. After the revelation, L&T bought around 50.8 million shares (8 per cent) from the exchanges at an average price of Rs 34.5 a share on January 23. This helped the company reduce the total cost of acquisition for its 12 per cent stake to Rs 80 a share, from Rs 157.
L&T’s stake fell to 6.9 per cent on the expanded share capital after Satyam’s acquisition by Tech Mahindra in April.
Satyam Computers did not report its results after the September quarter. In June, Satyam released financial figures for the first time after Raju's confession as Tech Mahindra launched an open offer.
If L&T sells its 6.9 per cent stake in Mahindra Satyam, it would make a total profit of Rs 325 crore at the current market price. L&T is still awaiting the response from the market regulator Securities and Exchange Board of India.
L&T stocks were down by 4.65 per cent to Rs 1,514 a share on the Bombay Stock Exchange on Friday.
