Satyam shines with U.S. debut

Satyam's successful NYSE debut paves the way for other Indian tech firms to brave overseas markets

In this story: Stunning U.S. debut Ray of hope for Indian techs RELATED STORIES, SITES

By CNN's Kristie Lu Stout

MUMBAI, India (CNN) -- India's Satyam Computer Services surged more than 21.5 percent at its debut on the New York Stock Exchange to close at $11.80.

U.S. investors snapped up shares of India's fourth-largest software exporter in Tuesday trading. Satyam's American Depositary Receipts (ADRs) soared as high as $11.93, an ascent of nearly 23 percent.

Analysts said the 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.

Satyam Computer Services' subsidiary Satyam Infoway is already listed in the U.S.

Stunning U.S. debut

The Satyam offering was subscribed "a little over seven times over," said Merrill Lynch, the deal's underwriters, to Reuters.

"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."

Last month, NASSCOM lowered its forecast for Indian software-export growth this fiscal year to between 40 to 45 percent from 52 percent.

The trade group blamed the economic downturn in the U.S., a key market that accounts for 60 percent of total Indian software sales, for the downgrade.

Over 75 percent of Satyam's software service business comes from the U.S. market, from clients such as General Electric, Ford and Dupont.

Analysts say the NYSE listing will raise Satyam's profile in a market already seduced by the promise of cost-efficient and value-added software from the NYSE-listed Wipro and Nasdaq-listed Infosys.

"It will provide more level of comfort to U.S. companies who are looking to outsource to Satyam," said NASSCOM's Gupta.

Ray of hope for Indian techs

Satyam's stunning debut also helped to lift the profile of tech shares back home.

Shares of Satyam rose 6.05 percent on the Bombay Stock Exchange in morning trading, with other tech stocks enjoying the morning rally.

Wipro, the country's biggest software company by market value, rose 2.83 percent and education software company NIT gained 2.55 percent.

"This is a very positive reaction," said Gupta. "The Indian industry will use Satyam's success as a benchmark to move ahead in the U.S. economy."

Ten Indian companies are now listed in the US: Satyam Computers and Satyam Infoway, Infosys, ICICI, ICICI Bank, Dr Reddy’s, Rediff, VSNL, Silverline and Wipro

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Infosys disappoints on growth
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Satyam Computer Services Ltd.

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