Financial bids will be in by 10 AM on 13th April

Deepak Parekh, Member of Board of Directors at Satyam Computers confirmed yesterday that the financial bids will be in by 10 AM on the 13th of April. The board would be looking at opening and evaluating the bids on the same day. There are also reports that the board is meeting informally today to discuss bids.

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Deepak Parekh said that the bids for Satyam stake will be opened on Monday. He expect the bids for Satyam to come in latest by 10 AM on Monday.

Satyam is looking to sell as much as 51% stake. The buyer will infuse funds to help revive the company.

Bidders may meet internally today to get a sense of bidding process on Monday. Tech Mahindra board will meet on Sunday. Another major bidder, L&T says that there is a need to discuss on strategies for Monday’s meeting. In case of highest bidder being followed by bid close to 90% of highest bid, open auction is likely. The picture should get clear by 2-5 PM on Monday.

CNBC-TV18 quizzed analysts if asset based valuation works for Satyam. Analysts are of the view that Satyam is high on land assets. CNBC-TV18 learns from sources that Satyam has close to 450-500 acres of land in India and 60-100 acres outside India. The built up area will gross over 75 lakh sq ft spread over several cities in India like Hyderabad, Bangalore, Chennai among others and also in Egypt, Malaysia and China. It also has land where IT SEZs can be constructed. It has 150 acres in Nagpur, 50 acres in Madurai and Gandhinagar and 20 acres in Pune. CNBC-TV18 had earlier reported that the total land value stands at Rs 1800 crore.

Analysts are divided whether to value these assets or not. First, these land assets have been given by State governments at very low costs. Most of this land comes with clauses that if they are not utilized, they have to be returned to the State Government. The RFP also clearly states that the prospective bidder cannot mortgage any asset of Satyam.

Experts suggest that going by just Satyam’s revenues will not help. For any IT company to built 75 lakh sq ft would entail a minimum investment of Rs 1500 crore and this should be treated as minimum valuation for Satyam.

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