Satyam’s decision to acquire Maytas Infra and Maytas Properties has invited strong reactions from the market, but Satyam continues to reason the deal.

Satyam Chairman and Founder B. Ramalinga Raju said that they have valued Maytas using fair methodology. He sees good growth prospect and fairly good case for the acquisition. Maytas Infra and Maytas Properties, he said, are in a position to support its own operations. He added that Satyam has a fair amount of asset base itself.

Ramalinga Raju said that Satyam would be using its liquid assets to build the infra business as he believes it has potential. He observed that some focused investors may not be aligned to the deal. Though he expects opposition from some investors, he is hopeful that most investors would appreciate the deal.

Raju clarified that there is no leverage on Maytas properties and there is almost no debt on its books. They have Rs 100 crore loan and Rs 200 crore cash on Maytas Properties. It is not in the best interest of Satyam to use its equity to buy assets, he added. The company has followed corporate governance policies diligently in the past, he reminded. They would continue to give enormous importance to IT business, Raju said.

Ramalinga Raju expects significant revenues from the infra business in few years. He is confident of creating value for shareholders from the combined entity. The company needs very limited approvals for the Maytas Properties’ acquisition. He expects Maytas Infra’s open offer to be completed in two-thee months. There is no case for reversing the deal, he said. Raju is expecting a knee-jerk reaction from the market.

Raju’s reasons to buy a major stake in Maytas seem very convincing to him, but to the shraeholder it does not bring in any joy. Do you feel that the justification given by the IT Major’s chairman for the buyout is convincing?

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