Satyam may use $21M greenshoe

Satyam may sell 2.175 million more ADS after its stunning NYSE debut this week

By CNN's Kristie Lu Stout

MUMBAI, India (CNN) -- India's Satyam Computer Services may raise an additional $21.2 million by selling 2.175 million more American Depository Shares (ADS).

The software firm has already raised $140.8 million by selling 14.5 million ADS since its New York Stock Exchange debut on Tuesday.

Its sparkling debut has spurred underwriter DSP Merrill Lynch to consider the additional 15 percent greenshoe option. It has also inspired other Indian IT firms to follow Satyam to market with offerings of their own.

Taking the greenshoe option

"We still have the right to exercise the additional 15 percent greenshoe option. If we do, it will take the amount raised to $162 million," DSP Merrill executive vice-president Amit Chandra told Reuters.

"That decision we will take depending on how the stock trades for the next week or two."

Satyam's ADS made a strong debut on the NYSE, closing at $11.80 -- up more than 21.5 percent -- on its first day of trading.

The company closed Wednesday in New York at $11.79.

Satyam's performance also lifted Bombay-listed software stocks like Wipro and NIIT. Satyam's own shares surged 7.36 percent to a high of 245 rupees.

Analysts said the ADS listing would not only boost Satyam's exposure in the critical U.S. market, but also pave the way for other Indian tech firms to brave overseas markets even during the global IT storm.

Indian IT firms HCL Technologies and Mason Global are said to be planning overseas listings.

"Considering the U.S. and IT slowdown, I think Satyam has done very well," Sangeeta Gupta of India's National Association of Software and Service Companies (NASSCOM) told CNN.

"Indian IT companies need overseas listings, and Satyam's response has reinforced that you can go in despite the market conditions."

Satyam shines with U.S. debut
May 16, 2001

Satyam Computer Services Ltd.

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