L&T sells 2.31 per cent of its Mahindra Satyam holding

Engineering and construction company Larsen & Toubro sold 27.2 million shares, or about 2.31 per cent of its equity, in software company Mahindra Satyam Ltd on the Bombay Stock Exchange at Rs114.90 a share, stock exchange data showed on Friday.

While there was no official word from L&T, there were enough indications that it was the seller, as several publications got unofficial confirmation of this. A television channel had reported late on Thursday that L&T will raise $65 million (Rs202.3 crore) by selling 27 million shares in Mahindra Satyam.

Mumbai-based L&T owns 81 million shares in Mahindra Satyam, the channel said, adding the company had hired Nomura for the share sale. In fact it is no secret that L&T has been itching to sell its stake in Mahindra Satyam as soon as possible.

Mahindra Satyam was formerly known as Satyam Computer Services. It was hit by India's biggest corporate fraud at the start of the year. L&T had bought 8.1 crore shares in the Hyderabad-based software exporter last year at an average price of Rs79 a share.

In April, L&T lost the race for control of Satyam to Tech Mahindra Ltd, a unit of Mahindra & Mahindra Ltd, in government-mandated bidding. L&T had built up a 12 per cent stake in Satyam, but the expansion of share capital because of the takeover meant it held 6.9 per cent in Mahindra Satyam.

Under the conditions of the Satyam sale, bidders were barred from selling stakes acquired prior to the bid for six months, as they were given access to confidential financial information of the fraud-hit company. Now that the waiting period is over, L&T has been quick to get rid of its holding.