US markets ended negative.
Europe also ended negative.
Asia has opened in red and is also trading in red.
Expect a gap down opening in Indian Markets.

NIFTY magic levels
Current Spot – 3554.60
Support – 3505 and 3470
Resistance – 3590 and 3645

Day Trading Ideas –

Sesa Goa
Buy above 141 for targets of 145 and 148
Sell below 131 for targets of 128 and 125

HUL
Buy above 228 for targets of 230 and 232
Sell below 221 for targets of 219 and 216

Satyam Computers
Buy above 46.20 for targets of 47.90 and 49.10
Sell below 41.25 for targets of 40.05 and 39.10

RNRL
Buy above 58.10 for targets of 59.25 and 60.10
Sell below 57.25 for targets of 56.50 and 55.90

Happy Investing !

Tech Mahindra’s acquisition of Satyam Computer Services may have come as a relief to the market, but analysts see a tumultuous journey ahead for the former. As regards the upcoming open offer, analysts aren’t sure of the kind of response the offer would evoke.

They also appear to be quite cautious about the impact of the acquisition on the prospects of Satyam, given the magnitude of the crisis and a lack of clarity on strategy the winner would adopt post-acquisition.

“Satyam Computer has a wide investor base and there could be a decent response from shareholders, particularly those who invested only recently with a short-term view,” said Prabhudas Lilladher head of research Apurva Shah. He feels Tech Mahindra would be keen on completing the offer successfully, as it would help the new promoters consolidate their holdings and also put them in a better position if they eventually plan merger of the two companies.

Most analysts feel it is too early to talk about the impact of the acquisition on prospects of Satyam, as the Tech Mahindra management would have a very challenging task of cleaning up the balance sheet of the scam-tainted company and rebuilding confidence among shareholders and the clients.

“Investors would wait for more facts to emerge from the Satyam story and the detailed gameplan of Tech Mahindra. The latter would try to benefit from the tainted company’s assets, particularly infrastructure, and use the client base for growing its business,” said KR Choksey Shares and Securities chairman Kisan Choksey.
Satyam’s existing client base would be a big advantage for Tech Mahindra, feel analysts. “At present, Tech Mahindra is totally focused on its UK-based client BT. With Satyam’s acquisition, it would have diversified client base and would enjoy the benefit of dispersion of client concentration,” said Religare Securities president (equity) Amitabh Chakraborty.

There seems to be a consensus on what L&T, which offered a bid of Rs 45.90 per share, would do with its holding of 12% in Satyam. Most analysts feel it makes sense for the engineering and construction conglomerate to hold on to its stake and wait for the valuation to rise to decent levels, before taking any call on the investment. – Economic Times.

Maimed and left gasping for a lifeline, Satyam Computer Services has finally found its new knight in shining armour, Tech Mahindra.

The bidding process for the beleaguered software firm culminated on Monday with TechMa emerging as the highest bidder with an offer price of Rs 58 per share. TechMa’s price outbid other suitors, engineering giant Larsen & Toubro and private equity player Wilbur Ross, by a comfortable margin.

L&T’s bid of Rs 45.90 per share and Wilbur Ross’ Rs 20, were not even within striking distance of TechMa’s deal-winning bid.

At Rs 58 per share, Tech Mahindra will acquire a controlling stake of 51% in Satyam for Rs 2,889 crore, pegging the total value of the company at Rs 5,665 crore. In the first stage, Satyam will issue 30.27 crore shares to TechMa, representing 31% of the company’s share capital, which will infuse Rs 1,756 crore into the company. In the second stage, TechMa will have to mandatorily make an open offer to Satyam’s existing shareholders for another 20%.

However, L&T, which holds a 12% stake in Satyam, will not participate in the open offer for shareholders as it has a lock-in period of six months.

Predictably, both the TechMa and Satyam stocks were caught in a volatile vortex during the days trading. Soon after the Satyam board meet in the early part of the day, the Tech Mahindra scrip on BSE gained 25% to Rs 400. However, late profit-taking shaved off part of its early gains and the stock closed at Rs 349, up 12.3%. While the Satyam stock rallied 16.5% in intra-day trades, it closed at Rs 49, up a mere 3.6%. In mid-session trading, the Satyam ADR was down 15% at $2.25 on New York Stock Exchange.

The acquisition catapults TechMa into the fourth position in the pecking order of IT firms, after HCL Technologies.

However, inevitably, questions are being asked about the winning bid. Have the Mahindras over-valued Satyam, especially since distressed asset buyer Wilbur Ross priced its bid as low as Rs 20? Interestingly, Cognizant, which was to bid jointly with Wilbur Ross, decided to back off at the last minute. Some IT analysts have also described the deal as “disastrous”.

Defending his bid price, TechMa chairman Anand Mahindra said: “When you are running in a race, you don’t look behind who’s chasing you. We believe our bid is rightly priced.” It is estimated that Satyam’s liabilities could be as high as $1 billion. TechMa director Bharat Doshi said that the bid price was determined by the company after taking into account Satyam’s liabilities.

Even though the auditors, Deloitte and KPMG, are still in the process of restating Satyam’s accounts, a rough calculation of the company’s financials was presented to the bidders. As per this calculation, Satyam’s annual revenues are expected to decline from $1.8 bn to $1.3 bn. Satyam’s operating margin is said to be around 3% vis-a-vis Tech Ma’s 22%.

For TechMa, Satyam complements its business, with no client overlap. While the former is a strong player in telecom (75% of revenues), Satyam caters to financial services, manufacturing and healthcare, among others. “It will require a fair amount of work to bring Satyam back to its past glory. It will be a challenge to make Satyam financially strong so as to retain clients,” said Vineet Nayyar, TechMa vice chairman and CEO.

With Satyam having a large clientele of over 500 clients -some of them as large as GE, Cisco, Citi and General Motors -Mahindra said: “I will personally reach out to John Chambers (chairman of Cisco), Vikram Pandit of Citi and Fritz Henderson (GM CEO) to restore confidence in Satyam and us.”

After 100 days of uncertainty, Satyam’s acquisition dispels the anxiety of 48,000 Satyamites, ushering in a sense of positivity. The company’s former chairman B Ramalinga Raju had, in January, revealed that he had manipulated the company’s accounts to the extent of Rs 7,800 crore. He has been behind bars since then, awaiting trial.

Announcing the winning bid, Kiran Karnik, chairman of the government-appointed Satyam board, said: “Today, we have reached a final culmination stage, and though there are a few steps more to go, what it marks is the end of uncertainty.”

The other logical question is: will TechMa retain the Satyam brand name, given the unwholesome ring it has acquired in the past five months? Meanwhile, Mahindra rubbished rumours that TechMa’s strategic partner, British Telecom, did not support the Satyam bid. Incidentally, British Telecom is also TechMa’s largest client. – Economic Times

Tech Mahindra wins the BID for Satyam Computers and the bid was for 58 rs , So they will paying 1757 crores for 31 percent holding from Satyam and they would be paying 2890 crore to acquire 51 percent stake in satyam .It heard that Larsen toubro bidded for only 49 rs.
Satyam fell down to Rs 48.85. A decent buy for Satyam is any level below Rs 40 with a medium term target of 60 or may be 65.

Satyam is a stock who’s movement you cant predict. This stock is moving according to the news and rumors coming.
First LNT hikes its stake in Satyam and now I Gate solutions and even Hinduja Group are eying Satyam.
When the stock price was 20 – 24 people thought it would go further down but it moved up from there as it got new board of directors, its management changed.
Now if the stock falls below Rs 40 it can be a value buy as Satyam is suppose to get order worth 400 million $ according to ET.
More over its management may be restructured again in 3 months.
Where trading is concerned Satyam is having good movements along with high volumes but one needs to be cautious in doing so.

Whats intresting this week. - $10 or Rs 500 laptop to be displayed on 3rd Feb.

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How would you trade Satyam ?
Short or Long ?
Comment.

US markets ended marginally positive.
Europe ended a negative note.
Asia is bonded to open flat to negative.
Expect Indian Markets to follow the same trend.
Markets now looking highly oversold.
The target for the Sensex is 9200 and the resistance to the up move is at 9528-9708
Nifty: (2846) the target for the Nifty is at 2740 and the resistance to the up move is at 2870-2922

Satyam saga is yet not over.

Day Trading ideas -

Jet Airways
Buy above 192 for targets of 195 and 198
Sell below 182 for targets of 178 and 175

HDIL
Buy above 113 for targets of 117 and 120
Sell below 107 for targets of 103 and 100

Adlabs
Buy above 185 for targets of 188 and 192
Sell below 172 for targets of 169 and 165

Buy for short term
Rajesh Exports at 21 for targets of 25 with a SL of 19.40
Karuturi Global at 13.85 for targets of 18 with a SL of 11.50

Visit my new blog Squamble.

Happy Investing

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Satyam saga is still going on. Inflation is cooling and IIP numbers come good.
We saw volatility last week.
The comming week I dont expect much of upside.
I am bullish on FMCG and Cement stocks and to some extent energy stocks such as NTPC and BHEL.

Stock to watch out this week.

NTPC
LNT
Punj Llyod
BHEL
Unitech
Suzlon

Written By -
Vinod Jethmalani.

The past week was a horrible one. A company like Satyam can do such a big fraud, unbelievable.

The stocks made a high of 189 and a low of 11.50 in the past week. Its all time high is 575 and all time low is 11.50.

Raju is now sent in jail. But the innocent share holders are now in trouble.

The Indian markets fell 6.04% n the last week.

Though inflation is cooling no sign of good news in seen in the markets.

We have our Quarterly results coming this week for many companies. This will act as a major trigger to the movement in markets.

Markets will lie in a range of 2700 – 3000 (NIFTY) in this week.

Not much of upside is expected.

Satyam saga is yet going on will also decide the trend of the market.

IIP data is suppose to arrive tomorrow so be cautious.

Stocks to look out for in this week.

Satyam – I personally feel not to buy this stock. But this stock will be the most volatile in the coming week.

TCS, Wipro, Infosys – The key rivals of Satyam can benefit as the order book of Satyam can be passed to its rivals.

LNT – LNT bags 1100 crs order last week can give some gain.

Unitech – This is one badly beaten up stock and it bought at bottom can give some good gains. Best buy would be 28 -30 range.

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In 2007, ICAI had found partners of PwC guilty of professional negligence in underproviding for non-performing assets in the now-defunct Global Trust Bank (GTB). But this was only after RBI had blacklisted the firm when a string of irregularities surfaced at GTB. In July 2006, PwC’s Japanese affiliate Chuo Aoyama was handed a two-month ban on auditing by Japan’s Financial Services Agency, for allegedly certifying false accounts of consumer products major Kanebo. (Source ET)

I need answer from Mr.Raju and PWC What about uncertain future of 53,000 employees of Satyam.

My appeal to all trader please avoid trading in this scrip irrespective of Long or Short.
Satyam made a low of 11.50 odd today and is trading at Rs 21 now.

This article is written by Dhawal Joshi.

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