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PROJECT REPORT
ON
STOCK OPTION & VALUATION
OF
SATYAM COMPUTER & INFOSYS
SUBMMITED BY
Dhirajlal P. Nakum
Reg. No. – 520849649
Maunik G. Shah
Reg. No. –520841222
MBA 3 rd Finance
Roll No:
GUIDED BY: SHWETA SHARMA
TO
SUBMITTED TO
BARODA INSTITUTE OF MANAGEMENT
STUDIES
MANJALPUR, BARODA
Preface
Dhiraj P. Nakum
Maunik G. Shah
OMPANY CERTIFICATE REGARDING COMPLETION OF TRAININ
Dhrumesh G. Shah
Money Multiplier
(Vadodara Stock Exchange)
or Magazine.
Certified by:
Faculty-Finance Vice-
dean
Category
• Investments
Address
503,fortune tower
Sayagigunj,
Vadodara – 39005
Land mark
• Near M.S.University
Phone
0265-6544764
0265-2226083
Mobile
9879517139
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Search By Keyword
• Stock Market Investment
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• BSE Share Brokers
• Buying Shares
• Chit Fund Business
• Financial Sector
SPECIALIZATION SPECIFIC DEPARTMENT OVERVIEW
• RESEARCH METHODOLOGY
➢ EXPLORATORY OBSERVATORY PROJECT
➢ UNIVERSE UNDER STUDY
➢ SAMPLE SIZE FOR COLLECTION
➢ PREPARATION OF QUESTIONNAIRE
➢ METHODOLOGY FOR DATA COLLECTION
• STOCK OPTION
➢ DEFINATION
➢ TYPES
• STOCK VALUATION
➢ DEFINATION
➢ TYPES
• STOCK VALUATION
➢ SATYAM COMPUTER PVT.LTD.
➢ INFOSYS LIMITED
• CONCLUTION
• FINAL CONCLUTION
• LIMITATION
• FUTURE EXPANTION
• BIBLIOGRAPHY
• QUESTIONNAIRE
• NO OBJECTION CERTIFICATE
Stock market index
• SENSEX
Sensex is the stock market index for BSE. It was first compiled in
1986. It is made of 30 stocks representing a sample of large, liquid
and representative companies. The base year of SENSEX is 1978-
79 and the base value is 100.
• NIFTY
Nifty is the stock market index for NSE. S&P CNX Nifty is a 50
stock index accounting for 23 sectors of the economy. The base
period selected for Nifty is the close of prices on November 3,
1995, which marked the completion of one year of operations of
NSE’s capital segment. The base Value of Index was set at 1000.
Research methodology
Scope of study
This study was aimed to explore the habit of trading, their difficulty and their
interest in the stock market of trading.
Research Design
Source of information
Primary data : primary data would be collected from 6 different areas of
Baroda city.
Secondary information is collected from internet and news paper articles
Sampling method
Quota sampling method was used to collect the data. We were asked to contact
1000 respondent and conduct interview with help of questionnaire.
Sampling media
The primary data will be collected with the help of personal interview
from the selected respondent.
Sampling size
We have tried to survey total 1000 respondents from different areas of
Baroda city.
Considerations
• When the market is volatile, a company may change the price of the
option to reflect the present state of the market. This is done by canceling
the original option and offering a new option to employees, usually at a
lower price. Outside investors are not eligible for this, however. Non-
qualified options are transferable to children and even to charities.
Qualified stock options may not be transferred. Additionally, no more
than $100,000 in qualified stock options may be "exercised" in a single
year.
• A stock option is a contract that gives the buyer the right to buy or sell
stock at a particular price on or before a certain expiration date, however
there is no obligation to do so. If you let the expiration date pass, the
option becomes worthless, but you're only out the premium paid. Here is
a look at the different types of stock options and how they work.
Call Option
• a call option gives the buyer the option to purchase an agreed quantity of
a particular stock from the seller on or before an expiration date at a
certain price, known as the strike price. The seller has to sell the stock if
the buyer wants it by the expiration date. The buyer pays a fee (called a
premium).
• The buyer benefits when the stock is moving up, bringing its value above
the strike price. The option is then said to be 'In the Money.' On or before
the expiration date, the buyer acquires the stock at the strike price and
makes a profit by selling it. If the stock ends up lower than the strike
price, the buyer is not under the obligation to buy.
Put Option
• Put options are profitable for the seller when the market is in decline.
• If you are selling a put option to somebody who holds stock, you are
known as a "writer." The writer is someone who is bullish on the
market and collects a premium. If the stock's value increases, the
writer gains as the seller of the stock will not be inclined to sell it at
the strike price, when the market value is higher. The premium is the
writer's maximum gain, and having the option expire is the best case
scenario.
• Leaps
LEAPS allow the holder to keep track of the long-term price movement
without the need to invest the larger amount of capital that would be
required to own the stock outright. LEAPS can be exercised at any time
before expiration.
• Say you were spot on and the price of XYZ stock rallies to $50 after the
company reported strong earnings and raised its earnings guidance for the
next quarter. With this sharp rise in the underlying stock price, your call
buying strategy will net you a profit of $800.
• Let us take a look at how we obtain this figure.
• If you were to exercise your call option after the earnings report, you
invoke your right to buy 100 shares of XYZ stock at $40 each and can
sell them immediately in the open market for $50 a share. This gives you
a profit of $10 per share. As each call option contract covers 100 shares,
the total amount you will receive from the exercise is $1000.
• Since you had paid $200 to purchase the call option, your net profit for
the entire trade is $800. It is also interesting to note that in this scenario,
the call buying strategy's ROI of 400% is very much higher than the 25%
ROI achieved if you were to purchase the stock itself.
$ or € or
estimated stock price
£
$ or € or
last dividend paid
£
discount rate %
You also generally assume that the company will go through several distinct phases,
starting with a "growth" phase where earnings are increasing at a predictable rate,
followed by a "mature" phase where earnings level off to a constant level.
To find the value of a stock, you need to calculate all of these future earnings (out to
infinity!), and then use your own desired rate of return as a discount rate to find their
present value. The infinite sum of these present values is the fair market value of the
stock; or more accurately, it's the maximum price you should be willing to pay.
(The current fair market value is equal to the sum of the heights of all of the green
bars, which are the present values of the corresponding blue bars.To get the formula,
we'll define some variables:
We're assuming that earnings will start to grow for N years, and then level off:
Year Earnings
1 E(1 + G)
2 E(1 + G)2
N E(1 + G)N
Now we'll write R for our desired rate of return, and use it to find the present
values of all of these earnings:
Year Present Value of Earnings
1 E(1 + G)/(1 + R)
What we've got here is two geometric series; one going from 1 to N, and the
other going from N + 1 to infinity. The result is basically too ugly to bother
writing out; it's more sensible just to use the formula for the geometric series in
a spreadsheet or computer program. When people do write it out, they usually
write it this way:
P = E1Q + E2Q2 + ... + ENQN + ENQN x Q/(1 - Q)
or, equivalently,
P/E=1/R
So if you take a desired return of 11%, you find that the theoretical "fair" P/E
ratio of the zero-growth stock is 1/.11 = 9.09, which sounds reasonable.
Constant-Growth Case
A second special case that people use is the "constant growth forever" case,
meaning N is infinity. The formula in this case simplifies to
P = E1 / (R - G)
Stocks have two types of valuations. One is a value created using some
type of cash flow, sales or fundamental earnings analysis. The other value
is dictated by how much an investor is willing to pay for a particular
share of stock and by how much other investors are willing to sell a stock
for (in other words, by supply and demand). Both of these values change
over time as investors change the way they analyze stocks and as they
become more or less confident in the future of stocks. Let me discuss
both types of valuations.
Earnings per Share (EPS). You've heard the term many times, but do
you really know what it means. EPS is the total net income of the
company divided by the number of shares outstanding. It sounds simple
but unfortunately it gets quite a bit more complicated. Companies
usually report many EPS numbers. They usually have a GAAP EPS
number (which means that it is computed using all of mutually agreed
upon accounting rules) and a Pro Forma EPS figure (which means that
they have adjusted the income to exclude any one time items as well as
some non-cash items like amortization of goodwill or stock option
expenses). The most important thing to look for in the EPS figure is the
overall quality of earnings. Make sure the company is not trying to
manipulate their EPS numbers to make it look like they are more
profitable. Also, look at the growth in EPS over the past several
quarters / years to understand how volatile their EPS is, and to see if they
are an underachiever or an overachiever. In other words, have they
consistently beaten expectations or are they constantly restating and
lowering their forecasts?
Price to Earnings (P/E). Now that you have several EPS figures
(historical and forecasts), you'll be able to look at the most common
valuation technique used by analysts, the price to earnings ratio, or P/E.
To compute this figure, take the stock price and divide it by the annual
EPS figure. For example, if the stock is trading at $10 and the EPS is
$0.50, the P/E is 20 times. To get a good feeling of what P/E multiple a
stock trades at, be sure to look at the historical and forward ratios.
Growth Rate. Valuations rely very heavily on the expected growth rate
of a company. For starters, you can look at the historical growth rate of
both sales and income to get a feeling for what type of future growth that
you can expect. However, companies are constantly changing, as well as
the economy, so don't rely on historical growth rates to predict the future,
but instead use them as a guideline for what future growth could look like
if similar circumstances are encountered by the company. To calculate
your future growth rate, you'll need to do your own investment research.
The easiest way to arrive at this forecast is to listen to the company's
quarterly conference call, or if it has already happened, then read a press
release or other company article that discusses the company's growth
guidance. However, remember that although company's are in the best
position to forecast their own growth, they are not very accurate, and
things change rapidly in the economy and in their industry. So before
you forecast a growth rate, try to take all of these factors into account.
• They may have been growing earnings at 10 - 15% over the past several
quarters / years because of cost cutting, but their sales growth could be
only 0 - 5%. This would signal that their earnings growth will probably
slow when the cost cutting has fully taken effect. Therefore you would
want to forecast earnings growth closer to the 0 - 5% rate than the 15 -
20%.
PEG Ratio. This valuation technique has really become popular over the
past decade or so. It is better than just looking at a P/E because it takes
three factors into account; the price, earnings, and earnings growth rates.
To compute the PEG ratio (a.k.a. Price Earnings to Growth ratio) divide
the Forward P/E by the expected earnings growth rate (you can also use
historical P/E and historical growth rate to see where it's traded in the
past). This will yield a ratio that is usually expressed as a percentage.
The theory goes that as the percentage rises over 100% the stock becomes
more and more overvalued, and as the PEG ratio falls below 100% the
stock becomes more and more undervalued. The theory is based on a
belief that P/E ratios should approximate the long-term growth rate of a
company's earnings. Whether or not this is true will never be proven and
the theory is therefore just a rule of thumb to use in the overall valuation
process.
Return on Invested Capital (ROIC). This valuation technique measures
how much money the company makes each year per dollar of invested
capital. Invested Capital is the amount of money invested in the company
by both stockholders and debtors. The ratio is expressed as a percent and
you should look for a percent that approximates the level of growth that
you expect. In it's simplest definition, this ratio measures the investment
return that management is able to get for its capital. The higher the
number, the better the return.
Return on Assets (ROA). Similar to ROIC, ROA, expressed as a
percent, measures the company's ability to make money from its assets.
To measure the ROA, take the pro forma net income divided by the total
assets. However, because of very common irregularities in balance
sheets (due to things like Goodwill, write-offs, discontinuations, etc.) this
ratio is not always a good indicator of the company's potential.
Price to Sales (P/S). This figure is useful because it compares the
current stock price to the annual sales. In other words, it tells you how
much the stock costs per dollar of sales earned. To compute it, take the
current stock price divided by the annual sales per share. The annual
sales per share should be calculated by taking the net sales for the last
four quarters divided by the fully diluted shares outstanding (both of
these figures can be found by looking at the press releases or quarterly
reports). The price to sales ratio is useful, but it does not take into
account any debt the company has. For example, if a company is heavily
financed by debt instead of equity, then the sales per share will seem high
(the P/S will be lower). All things equal, a lower P/S ratio is better.
However, this ratio is best looked at when comparing more than one
company.
Market Cap. Market Cap, which is short for Market Capitalization, is
the value of all of the company's stock. To measure it, multiply the
current stock price by the fully diluted shares outstanding. Remember,
the market cap is only the value of the stock. To get a more complete
picture, you'll want to look at the Enterprise Value.
Enterprise Value (EV). Enterprise Value is equal to the total value of
the company, as it is trading for on the stock market. To compute it, add
the market cap (see above) and the total net debt of the company. The
total net debt is equal to total long and short term debt plus accounts
payable, minus accounts receivable, minus cash. The Enterprise Value is
the best approximation of what a company is worth at any point in time
because it takes into account the actual stock price instead of balance
sheet prices. When analysts say that a company is a "billion dollar"
company, they are often referring to it's total enterprise value. Enterprise
Value fluctuates rapidly based on stock price changes.
EV to Sales. This ratio measures the total company value as compared to
its annual sales. A high ratio means that the company's value is much
more than its sales. To compute it, divide the EV by the net sales for the
last four quarters. This ratio is especially useful when valuing companies
that do not have earnings, or that are going through unusually rough
times. For example, if a company is facing restructuring and it is
currently losing money, then the P/E ratio would be irrelevant. However,
by applying a EV to Sales ratio, you could compute what that company
could trade for when it's restructuring is over and its earnings are back to
normal.
EBITDA. EBITDA stands for earnings before interest, taxes,
depreciation and amortization. It is one of the best measures of a
company's cash flow and is used for valuing both public and
private companies. income statement, take the net income and
then add back interest, taxes, depreciation,
Valuing Stock Options and Other Equity Based Compensation
• Appraisal Economics can value stock options and other equity based
compensation for various purposes, including:
✔ Financial reporting, principally under SFAS 123R
✔ Gift and estate tax valuations
✔ Other tax-related purposes
✔ We have extensive experience valuing all types of stock options and
equity based compensation, from simple call options to more complex
derivatives, including:
✔ Straight stock options
✔ Restricted stock
✔ Stock options with accreting exercise prices
✔ Profits units
✔ Outperformance units
✔ Contingent purchase price elements
We have valued instruments that are subject to vesting conditions
including earnings targets, share price targets, total return targets and, of
course, time-based vesting.
• We apply a wide range of valuation techniques, including:
✔ Closed form models such as Black-Scholars-Merton
✔ Lattice models, such as a binomial model
✔ Synthetic option modeling
✔ Monte Carlo simulations
• Valuing stock options and other types of equity based compensation has
become more important with the implementation of SFAS 123R.
Commencing in the first fiscal year subsequent to June 15, 2005, all
publicly traded companies are required to expense stock based
compensation in accordance with SFAS 123R.
• 1987
➢ On 24th June Company was incorporated as a Private Limited Co. for
providing Software Development and Consultancy Services to large
corporations. The company was promoted by B Rama Raju and B
Ramalinga Raju. The company has set up two software Technology
Parks, one at Mayfair Centre, Secunderabad and other at Qutuballapur of
Ranga Reddy Dist. of A.P. The company also developed a software
Development center in Bangalore.
• 1991
➢ On 26th August it was converted into a Public Limited Company.
• 1992
➢ The Company went in for a Public Issue of Equity shares. The company
has set up facilities at Secunderabad, Hyderabad and Bangalore. The
Company has created infrastructural facilities consisting of workstations
with modern communication and networking equipment.
➢ Satyam went in for a public issue of equity shares with the main objective
of setting up a software technology park and a 100 percent export
oriented unit for software development with a dedicated 64 KBPS
satellite link.
• 1993
➢ During the year company has entered into a joint venture agreement with
Dun & Bradstreet Corp., U.S.A. for development of software’s.
• 1994
➢ On January 26th a joint venture company called Dun & Bradstreet
Satyam Software (P) Ltd. was incorporated.
• 1995
➢ During the year company issued 37,17,000 12% unsecured fully
convertible debentures part "A" of Rs.100 each on right basis for the
shareholders in proportion of 1 FCD for every 5 shares held. The
company also issued 37, 17,000-12% FCD's-part `B' Rs.60 per
debentures in August which can be converted into equity shares of Rs.10
each at premium of Rs.50 per share on August 1996.
• 1996
➢ During the year two offices were set up, one in USA and other in Japan.
And the company has added new business partners in Australia,
Canada, Japan and Europe.
➢ During the year company promoted 4 subsidiaries. Viz Stayam
Renaissance Consulting Ltd., Satyam Enterprise Solutions Pvt. Ltd.,
Stayam Info way Pvt. Ltd and Satyam Info way Pvt. Ltd.
• 1997
➢ During the year company has added additional space in Secunderabad
and Bangalore. And new software development centers were opened in
Hyderabad, Pune, Chennai and Bhubaneswar during the year. The
company has established a school at Indian Institute of Information
Technology at Hyderabad, joining a select band of global corporations
like IBM, Microsoft and oracle who are also participating in IIIT's
activities.
➢ Satyam Computer Services Ltd. (SCSL), the Hyderabad-based software
company, setting up three more new software development centers at
Chennai, Pune and Bhubaneswar.
➢ Satyam Info way (P) Ltd. (SIL), a subsidiary of Satyam Computers, has
signed an agreement with Sterling Commerce, International Group of the
U.S. to provide electronic data interchange (EDI) and other value
added electronic commerce solutions throughout India.
➢ Two new offices have already been set up in the US, and another in
Japan. New business partners have been added in Australia, Canada,
Japan and Europe.
➢ Satyam Info way is a 100 per cent subsidiary of the Hyderabad-based
software major, Satyam Computer Services Ltd.
➢ Dun & Bradstreet Corp. USA (D&B), is likely to buy out the 24 per
cent stake of joint venture partner Satyam Computers Services and gain
majority control, 76 per cent of the stake is held by D&B.
➢ The joint venture was set up to provide software services to D&B client’s
world wide. Dun and Bradstreet - Satyam Software is the largest single
location software unit for D&B in the world.
➢ Satyam Computer has four subsidiaries: Satyam Spark Solutions, Satyam
Info ways, Satyam enterprise Solutions and Satyam Renaissance,
Consulting, Spark solutions focuses on software products, Info ways
operates in the field of electronic commerce and electronic data
interchange.
➢ Satyam Computer Services Ltd announced that it had divested its 24 per
cent ownership of Dun & Bradstreet Satyam Software Pvt. Ltd (DBSS)
in favor of Cognizant Software Solutions Corporation, a subsidiary of
Cognizant Corporation, US.
➢ Satyam Computer Services Ltd., has been selected by the Switzerland-
based World Economic Forum and World Link magazine as one of
India's most remarkable and rapidly growing entrepreneurial companies.
➢ The funds will be raised through a Rs 20 crore debt and the rest will be
provided by the parent company as equity in the subsidiary to set up the
nationwide network.
• 1998
➢ -Satyam Info way, a wholly-owned subsidiary of Satyam Computer
Services Ltd., has received the Technical Engineering Centre (TEC)
approval from the Department of Telecommunications (Dot) for
commercializing its operations.
➢ The company is a 100 percent EOU under the software technology park
scheme of the Department of Electronics, Government of India. It is
presently engaged in development and export of software to USA,
Canada, Sweden, Germany etc.
➢ Satyam Computer Services Ltd. opened its first overseas development
centre in New Jersey. The company proposes to set up seven such
development centers outside India, four of them in the US.
➢ Satyam Computer Services Ltd. has entered into an agreement with the
National Securities Depository Ltd. (NSDL) for providing its
shareholders with the facility of trading in the dematerialized form of
shares.
• 1999
➢ -The company is setting up offsite development centers which will have
high margin business and also ventured into the euro conversion business
which is slowly taking-off.
➢ Sataym Computer Services Ltd. will be setting up two offsite
development centers in addition to the existing seven centers across the
world.
➢ Satyam Computer Services Ltd., one of the fastest growing IT companies
in the country, has taken significant decisions recently including the
merger of three of its subsidiaries with the parent company and a 1:1
bonus issue.
➢ The company has also set up India's first Indian Institute of Information
Technology and is the first software company in India to get accredited
by (SEI CMM) level 5 certificates.
➢ Satyam Info way Ltd, is the second largest Internet services provider in
India based on the number of customers.
• 2000
➢ -Vision-Compass Inc., the US-based wholly owned subsidiary of Satyam
Computer Services Ltd., announced the global launch of Vision
Compass, a collaborative enterprise management software product.
➢ The Company has entered into an agreement with Venture Global
Engineering LIC, USA, to set-up a 50:50 joint venture for the software
development of CAD/CAM/CAE at Hyderabad.
➢ The Company launched an organization-wide transformation training
program - Customer-Oriented Global Organization (COGO)
initiative.
➢ The Company has announced its tie-up with Vignette Corporation of the
US for the implementation of e-business applications.
➢ Satyam Computer Services signed an equal joint venture with $6.3 bn US
networking company Computer Associates Inc (CA) to set up an
Application Service Provider (ASP) for small and medium enterprises.
➢ The Company and Texas-based Enterprise Inc, a major provider of
collaboration platform software for e-markets.
➢ Pepsi has entered its second cyberspace venture forging a tie-up with the
company and Hindustan Petroleum Corporation as the official beverages
supplier for their "Speed net project".
➢ SAS Institute India, a wholly owned subsidiary of the US-based SAS
Institute Inc., has tied up with the company as a SAS quality partner to
provide comprehensive data warehousing and data mining solutions to
various industry verticals.
➢ The Company has formed a strategic alliance with Microsoft Corporation
to provide Web and enterprise integration application deployment
solutions to US public sector customers utilizing Windows DNA 2000
technology.
➢ The Company and TRW Inc, the US-based $17 billion company, that
they have signed a letter of intent to form a strategic alliance wherein the
newly-formed joint venture would provide TRW and other global
companies both information systems and engineering services.
➢ The Company has signed an agreement with the US-based
edatafinder.com to build a comprehensive business intolerance e-market
site that will supply more than 200 types of business data online to
organizations around the globe.
➢ The Company has been named a 2000 Web Business 50/50 award
winner for SatyamWorld - its corporate intranet, to become the only
company to feature in this list.
➢ The Company has realized Rs 17012.53 lakes net of transaction costs and
tax through the sale of 347,2000 No. of equity shares of Satyam Info say
Ltd. to the Government of Singapore Investment Corporation Pvt. Ltd.
➢ The Company has signed a contract with Mercator, the IT subsidiary of
the UAE-based Emirates group, to provide product maintenance and
support activities for Mercator's products in the aviation industry.
➢ Satyam Computer Services inaugurated an offshore development centre
`Mercator Satyam Centre' - to exclusively handle projects for the $60
million Mercator, an IT subsidiary of the UAE based Emirates group.
➢ C Srinivas (Srini) Raju has resigned as the executive director of the
company with effective from September 1.
➢ Satyam Computer Services Ltd. and the US-based SEEC Inc have entered
into a strategic alliance to leverage the latter's tools and technology for
Sat yam’s worldwide e-business transformation practice.
➢ The Company has received the National HRD award - 2000 for
outstanding contributions to HRD.
➢ Satyam Computers is setting up a joint venture with the $17 billion TRW
Inc, a Fortune-100 Company in the US. - The Company has re
launched its shopping channel as www.sifymall.com, which would now
offer ` celebration of value' shopping.
➢ Prabhu Sinha, a senior vice-president of Satyam Computer Services,
received Qimpro Silver Award for 2000-01.
➢ Satyam Computer Services Ltd. and Arriba Inc., a leading business to
business e-commerce platform provider has entered into an alliance.
➢ Satyam Manufacturing Technology, a joint venture between Satyam
Computers Services and US-based TRW, has received a $200 million
contract from TRW.
➢ Mr. B. Ramalinga Raju, Chairman of Satyam Computer Services, has
been awarded the IT Man of the Year 2000 Award by Dataquest.
➢ Satyam Computer Services has acquired 23 acres in Bangalore to set up
a new software development centre.
• 2001
➢ The Company has entered into a long-term collaboration agreement with
Centre for Cellular and Molecular Biology, to jointly identify business
opportunities at the global level for IT-enabled services in bioinformatics
and related fields.
➢ The Company has entered into a partnership with i2Technolgies.
➢ Satyam Computer Services Ltd., the software services company based in
Hyderabad, is set to commission its new development centre in the Dubai
Internet City.
➢ The Company has been rated as one of the 10 well-regarded companies in
the country in prestigious 2000/2001 Review 2000 Survey conducted by
the Hong Kong-based Far Eastern Economic Review.
➢ Satyam Computer Services has become the first of the top Indian
software services companies to open its facility at Dubai Internet City.
➢ The Company has won the Frost & Sullivan market engineering award
for Competitive Strategy 2001 in the application service provider
category. - The American depositary shares (ADS) of Satyam Computer
Services on May 16 was listed at $11.16 on the New York Stock
Exchange (NYSE) at a premium of 14.9 per cent to the offer price.
➢ Satyam Computer Services has expanded its partnership with the US-
based Health axis Inc., a leading supplier of healthcare technology
solutions. Satyam has also agreed to become the primary integration
partner for deploying the Insur-Enroll solution. Satyam bagged a major
project from Health axis in the last quarter.
➢ Satyam Computer Services on August 27 announced a global strategic
alliance with SEEC Inc., a Pittsburgh-based leading provider of
component and web services solutions for insurance and other industries.
• 2002
➢ Satyam Computer Launches operations in China.
➢ Satyam Computer Services Ltd a leading global IT services firm, on
August 8, 2002 announced the signing of an agreement with Saint-
Gobain Abrasives, Inc a Massachusetts (USA) based corporation to
provide IT services.
➢ Satyam Computer Services Ltd has entered into a Premier Partnership
with Ireland-based IONAr, a leading e-Business Platform provider for
Web Services Integration, to deliver the Orbit E2A Web Services
Integration and Application Server Platforms.
➢ Nipuna Services Ltd, the BPO subsidiary of Satyam Computer Services
Ltd announced the appointment of Mrs. Ram Ramasundar as COO of
the company. Further the company has also appointed Venkaswamy
Nagendra as Chief Marketing Officer and M Satyanarayana as Chief
Marketing Officer of the company.
• 2003
➢ Jargon Technologies appoints Satyam Computer for State-of-the-Art
Enterprise Resource Planning Solution
➢ Embarks on an organizational and business transformation initiative
termed Orbit 5
➢ Giga Information Group includes Satyam Computer Services Ltd. as the
top choice for SAP support among offshore service providers
➢ World Bank gives outsourcing contract to Satyam Services
➢ Satyam and Ansys Inc Forge Global Strategic Alliance, Offer Process
Integrated Engineering Simulation Solutions
➢ Enters into strategic alliance with semiconductor major Texas
Instruments to provide consulting services for DSP (digital signal
processing) customers
➢ Satyam Computer & Correlate Technologies announce partnership to
provide Correlate K-Map solutions worldwide
➢ Sets up Offshore Solutions Center for TRW Automotive in Chennai
➢ Satyam, Hummingbird open ETL/BI competency centre in Singapore
➢ Satyam unveils Samanvay to create learning opportunities to staff
families
➢ Satyam & Microsoft sign MOU to provide world class IT outsourcing
services to Asia Pacific region
➢ Launches Global Solutions Centre in Malaysia
➢ Conducts first ever global customer summit (SatyamWorld) In San
Diego, California, USA
➢ Forms alliance with Yahoo, a leading portal and collaboration platform
provider, to deliver solutions centered on Yahoo! Portal and Messenger
platforms
➢ Bags 2003 Account Performance Award from Strategic Account
Management Association (SAMA) during its annual conference in
Orlando, Florida
➢ Implements SAP at Oman Trading Establishment
➢ Signs up a long term contract with World Bank
➢ Sat yam’s solution bags CSI National IT Award for best packaged
application
➢ Approves enhancement of investment limit by Foreign Institutional
Investors (FII's) under Portfolio Investment Scheme from 49% to 60%
➢ Commences a Student Administration System (SAS) solution
implementation for Singapore- based Universities 21 Global (U21G), a
leading online university initiative, offering on-line higher education to
students all over the world
➢ Sat yam’s advanced e-Logistic Solution System for Konsortium Logistic
Bhd Malaysia goes live
➢ Launches Offshore Development Center (ODC) in Bangalore to
provide high end product development support to Fujitsu Ltd., a leading
provider of customer focused IT and communication solution for the
global marketplace
➢ Develops a virtual facility in the 120-acre technology campus located in
Hyderabad
➢ Warburg Pincus, a venture capital & equity fund, sells 2.6% Satyam
shares
➢ Allotment of 11533 equity shares through circular resolution on
October 28, 2003 under stock option plans of the company.
➢ The company has developed a virtual facility in the 120-acre technology
campus located in Hyderabad. Satyam Live captures the soft
infrastructure, the products etc. of a knowledge driven company.
➢ The Compensation Committee of Directors of the company allotted 3507
equity shares
➢ Allotted 24271 equity shares through circular resolution on October 28,
2003 under stock option plans of the company.
➢ Company has signed a multi-year agreement with American International
Technology Enterprises, Inc.
➢ The company has sold 1m equity shares of Sify in a private placement
through Sify's sponsored ADR program.
➢ The company sells its Sify stake to Venture tech increasing venture tech's
stake to 16.8 per cent from 13.8 per cent.
➢ Satyam Computer Services honored with prestigious IBM Lotus award
➢ Satyam acquires Mega soft in stock deal
➢ Sat yam’s new development centre in Canada
➢ Fidelity Investments buys 245,500 equity shares of the company, stake
increases to 5.05%
➢ Signs a regional partnership with the Nasdaq-listed Actuate Corporation,
an enterprise reporting applications provider, to collaborate in the Asia
Pacific region. Following this move, the Satyam-Actuate Centre of
Excellence will be set up at Sat yam’s Global Solutions Centre in
Cyberjaya, Malaysia
• 2004
➢ Sat yam’s Nipuna appoints new CEO & COO
➢ Satyam Computer Services Ltd has entered into a tie-up with OAT
Systems Inc of the US to provide comprehensive radio frequency
identification devices (RFID)-based solutions to its customers across the
globe
➢ IT major Satyam Computer Services Ltd (SCSL) has launched a unique
platform called 'Virtue' which will provide two-way communication
between the company and the selected candidates for employment
➢ Satyam Computer Services Limited on Saturday inaugurated the
company's ninth facility in Hyderabad
➢ Satyam launches its largest Global Development Center outside India at
Melbourne, Australia
➢ Satyam forges alliance with Cyclone Commerce
➢ Satyam Computer joins mainframe migration alliance (MMA)
• 2005
➢ Satyam ranked 3rd in Corporate Governance Survey by Global
Institutional Investors
➢ Satyam Computer launches ESA service offering on May 05, 2005.
➢ Satyam Computer joins Microsoft Insurance Initiative
➢ Satyam Computer enters into global alliance agreement with Meridian
Systems.
➢ Satyam Computer launches business solutions laboratory, FUTURUS
➢ Satyam Computer announces partnership with Hungary's premier science
IT institute MTA SZTAKI
➢ announced a services and technology collaboration to offer supply chain
solutions to customers in the Asia Pacific region across industry verticals.
• 2006
➢ Satyam Computer launches Offshore Development Center for INVISTA
in Bangalore
➢ Satyam Computer Services Ltd on October 26, 2006 has announced that
it has achieved global certification in the ISO 9001 (quality
management), ISO 20000 (information technology service management
for Infrastructure Management Services and Network & Systems), and
ISO 27001 (Information Security Management) standards. With the
successful audit of the development center at Budapest, Hungary, all
three certifications were conferred at an organization-wide level.
• 2007
➢ Satyam Computer Services Ltd has on March 15, 2007 has announced
that it has implemented an organization-wide, virtual learning
environment called Satyam Learning World.
➢ Satyam Computer Services Ltd on June 04, 2007 has announced that it
recently won Computer Associates Vision, Impact, Progress (VIP) Award
for an internal implementation and optimization of CA's service desk
platform.
➢ Satyam Computer Services Ltd on June 11, 2007 has announced that it
has forged an alliance with US-based JDA Software Group Inc., the
leading provider of supply and demand chain solutions to 5,500 of the
world's top retailers, manufacturers, and suppliers.
• 2008
➢ Satyam Computer Services Ltd has informed that Satyam BPO, the
business process outsourcing arm of Satyam, a leading global business
and information technology services Company, on April 10, 2008
announced that it has won two prestigious Shared Services Excellence
awards from the International Quality and Productivity Council.
➢ Satyam Computer has announced it has inked a pact with Info spectrum
to give third-party maintenance, repair and overhaul (MRO) and
component repair services for the global aviation industry.
• 2009
➢ Tech Mahindra has announced the name change of scam hit Satyam
Computers as Mahindra Satyam. This rebranding exercise symbolizes an
amalgamation of the values of Mahindra Group with Sat yam’s fabled
expertise, even as it retains that part of Sat yam’s identity which signifies
commitment, purpose and proficiency of the organization and its people,
according to Anand Mahindra, vice-chairman and managing director of
the Mahindra Group.
➢ Mahindra Satyam stated that it has secured contracts worth Rs 38 crore
in the Middle East and North America region (MENA) in Q2 of FY
Profile
2009-10. of satyam computer Ltd
Boards of directors
C. Achuthan
T. N. Manoharan
C. P. Gurnani
Ulhas N. Yargop
M Damodaran
Gautam S Kaji
Gautam S Kaji is the former Managing Director for operations of the World
Bank with responsibility for Africa, East Asia and the Pacific and South Asia.
He also led the World Bank's finance and private sector development programs
and served as chair of the World Bank's operations committee, which reviews
all projects put forward for World Bank support. Prior to this, he worked in a
commercial bank. He is currently Chairman of Centennial Group - a
Washington-based Policy and Strategic advisory firm and their non-profit
initiative `The Emerging Markets Forum
Executive management team
Vineet Nayyar
Chairman
Vineet Nayyar is the Chairman of Mahindra Satyam.
An accomplished leader, Vineet has led several
organizations across industries creating high
performing teams and successful businesses. He has a
rich and varied experience having worked with the Government,
international multilateral agencies and the corporate sector both public
and private in a career that spans over 40 years.
C P Gurnani
Chief Executive Officer
A. S. Murty
Chief Technology Officer (CTO)
Vijayanand Vadrevu
Senior Vice President - Strategic
Initiatives
Hari Thalapalli
Chief Marketing Officer (CMO) and Chief People
Officer (CPO)
Hari Thalapalli serves as the Chief Marketing Officer
(CMO) and Chief People Officer (CPO) of Mahindra Satyam. He has
over two decades of experience in the IT industry and has been with
Mahindra Satyam for the past 11 years - playing vital roles in the
organization’s growth and during its turbulent phase in the recent past.
Padma Parthasarathy
Head – Special Initiatives
S Durga Shankar
Chief Financial Officer (CFO)
Manish Mehta
Chief Delivery Officer - Europe, APAC, MEA,
India
Manish Mehta is the Delivery Head for Europe,
APAC, MEA and India regions in Mahindra Satyam.
Previously, Manish was heading Mahindra Satyam’s
SAP and Managed Testing practices. Manish propelled Mahindra
Satyam’s SAP and testing practices into the global marketplace. The
top 5 global players by Forrester, and won Frost & Sullivan’s
Competitive Strategy Leadership Award for Offshore Testing Market
(2007).
Services
Bi & Pm
Business value enhancement
B2B / EDI
Content, process, Ux management
Digital convergence
Infrastructure services
Integrated engineering solutions
Operations management
Oracle solutions
Product and application testing
Product lifecycle management (PLM)
Platform solutions
SAP solutions
Supplier relationship management
Satyam scam
"It was like riding a tiger, not knowing how to get off without
being eaten," wrote the disgraced Raju in his letter.
• While there were rumours that Raju had fled India, his lawyer
has said he is in Hyderabad, the capital of the southern Indian
state of Andhra Pradesh, where the Satyam is headquartered.
• On Wednesday, Raju’s announcement had knocked the
company’s stock down a crippling 78 percent and sent the
sensitive index of the stock exchange at Mumbai, India’s
financial capital, plummeting by a substantial 7.3 percent. The
share price came down further on Friday.
• This scandal came barely a week after the government in New
Delhi announced an economic stimulus package to revive the
markets that have been adversely impacted by the ongoing
worldwide recession.
• Until recently, Satyam used to be India’s fourth-largest IT
company, specializing in developing computer software and
business process outsourcing.
• Satyam's stock is listed on the New York Stock Exchange, it had
business operations in 66 countries and counted 185 companies
in the Fortune 500 list as its clients and customers.
• "It’s a wake-up call for the Indian corporate sector," said Ashok
Kumar Bhattacharya, national managing editor of Business
Standard newspaper in an exclusive interview to IPS.
"Companies have to stick to the rule-book," he added.
• Investors, along with Indian government agencies, are now
demanding answers to why the value of their stock came down
by more than 1.9 billion dollars in one day on account of a
scandal that is being described as "India’s Enron" in reference to
the U.S. energy company that filed for bankruptcy in 2001,
leaving 5,000 people jobless and eliminating one billion dollars
in employee retirement funds.
• Many of Satyam’s 53,000 employees are expecting
unemployment as the dimensions of the scandal unfold,
investors withdraw and it is discovered how the company’s
coffers are almost empty. The 1.5 billion dollar fraud outweighs
the company’s entire salary bill for the last year of a little over
one billion dollars.
• The downfall of Raju, a 54-year old software industry veteran,
began nearly one month ago when Satyam attempted to acquire
two companies controlled by his sons - Maytas (Satyam spelled
backwards) Properties and Maytas Infra - for 1.6 billion dollars
in order to compensate for the holes in his books of account.
• The deal was abandoned 12 hours after it was announced when
investors objected, claiming it was an irresponsible misuse of
funds and an instance of nepotism.
• The Maytas deals acted as a red flag for international investors,
with a host of companies like Unpaid Systems of Britain
accusing Satyam of fraud, forgery and breach of contract.
• Shortly thereafter, on Dec. 23, the World Bank barred Satyam
from offering its computer services for eight years citing a
potential trail of corruption - data theft and bribery - that led to
Raju.
• The last straw perhaps came on Tuesday when an Indian
associate of Merrill Lynch terminated an agreement on grounds
of "material accounting irregularities".
Although several companies are trying to have a bite into Satyam Computers,
according to Gartner study, the company is likely to exist in its current form.
It is expected to discontinue some of its businesses, service lines or cease to
exist in certain geographies by 2010. The study indicated that even the name
Satyam may not be around by that time, as the company is expected to undergo
a complete change, in ownership and organizationally.
Satyam’s ability to sign on new clients during 2009 has significantly
diminished, says the study. ‘‘In addition, it will be challenged to invest in client
engagements, staff developments or R&D, all critical elements for IT services,’’
said Gartner’s V-P for research, Frances Karamouzis.
statements, most officials at this level managed to get off the hook even if
found guilty.
On the other hand, about 80 percent of respondents argued that putting
these programmes and controls in place will help organisations to set the tone of
zero-tolerance to fraud and create a mechanism for employees to report
wrongdoing to the appropriate authorities.
• Hyderabad, 14 Apr. Tech Mahindra Ltd. Placed the highest bid to acquire
Satyam Computer Services Ltd. On 13 April 2009. This is just over four
months after the massive accounting scandal was made public when the
founder, Ramalinga Raju, confessed to inflating the books to over $1
billion above their worth.
• The takeover bid is only a month after Satyam announced it was up for
sale. Tech Mahindra bid Rs 58 per share, above what Larsen & Toubro
and billionaire tycoon Wilbur Ross offered.
• Tech Mahindra will own 31% of the IT mammoth at a cost of Rs1,757
crore, or slightly more than US $350 million.
• “It looks like Mahindra got a bargain considering the firm is worth a
reported $2.1 billion. Who knows what the real value is, but it’s surely
more than Rs 1,757 crore for almost a third ofthe firm,” commented
Francesco Gopalakrishnan, EconomyWatch correspondent.
• “But then again, with the public’s suspicions up about accounting and
auditing mishaps in Indian IT firms, they would have to get a deal to take
over this scarred firm,” he added. “It’ll be a long, hard, road to build back
confidence and trust.”
• When the Satyam scandal hit the presses in early January this year,
rumors and suspicions about India’s IT Industry spread like wildfire. “I
didn’t think I could get any more business for a long, long time,”
lamented Ishan Singh, the owner of a small business process outsourcing
(BPO) firm in Hyderabad.
• Tech Mahindra plans to extend its ownership up to 51% by purchasing an
additional 20% at the same value. This brings Satyam’s valuation in
Mahindra’s eyes to $1.1 billion. Tech Mahindra bid 20% more than the
next-highest bidder and more than double the lowest bidder.
• Satyam has offices in a dozen countries and employs 40,000. It has more
than 650 clients around the world, and 185 of them are Fortune 500
corporations.
• Tech Mahindra is an Indian conglomerate famous for its SUVs, tractors,
and financial services. This foray into IT and outsourcing
demonstratesthe firm’s eagerness to diversify and expand.
• During a news conference on Monday, Tech Mahindra Chairman Anand
Mahindra explained the synergy the two firms could create, “Both
companies can benefit from each other,” he said.
• “Satyam provides a partner which is almost completely complimentary,”
agreed Vineet Nayyar, vice chairman of Tech Mahindra.
• Tech Mahindra was comfortable placing such a high bid in part because it
and Satyam have almost no overlap. The bulk of Tech Mahindra’s
software business is in telecommunications, a sector Satyam has largely
kept out of.
• Furthermore, in excess of 70% of Satyam’s business is in the US,
providing additional diversification for Tech Mahindra.
• Whenever mergers or acquisitions are made, job cuts will occur. And
considering Satyam’s profit margins are below 3%, Tech Mahindra
intends on even more cuts to increase profits.
• But some are skeptical considering the lack of common ground the firms
share. “There doesn’t seem to be any common thread of synergy,” said
Edelweiss Securities analyst Viju George.
• However, the CEO of Satyam, A. S. Murty, was certainly thankful for
this renewal, “I would like to compliment each of the Satyamites and
their families for standing together and with unflinched support, taking
care of all our deliverables to our customers…We welcome the change
and we make sure that all our stakeholders are completely delighted.”
• Tech Mahindra, the successful buyer of Satyam, has asked European and
US competition authorities to approve the takeover.
• Sources told the Wall Street Journal that Tech Mahindra filed for
regulator approval in Europe on Monday and would do the same for US
regulators on Tuesday.
• Four Tech Mahindra executives, including MD Vineet Nayyar, were
invited to attend a Satyam board meeting yesterday - the four are
expected to join the board as the deal closes.
• The board said Satyam will keep its existing leaders, and for now will
continue to operate as a standalone business.
• Nayyar said Tech Mahindra had been impressed by Satyam's
management and staff, and had complete confidence in their ability to
restore the company's fortunes.
• Tech Mahindra is a telecoms specialist and is looking to Satyam to spread
its business into new markets. But the firm admitted its immediate
business was to retain worried customers and win back business lost as a
result of the recent crisis.
• Satyam's future was put into doubt when founder Ramalinga Raju
admitted inflating company profits by $1bn. He remains on remand along
with his brother and two PriceWaterhouse auditors.
• Tech Mahindra has also put cash into an escrow account to fund the buy.
• Dutch regulators have approved Satyam's request to be delisted from
NYSE Euronext.
• New Delhi - Tech Mahindra Ltd, the technology arm of India's Mahindra
Group, successfully bid for controlling equity in defrauded information
technology firm Satyam Computer Services Ltd, Satyam's board
announced Monday.
• Tech Mahindra outbid engineering major Larsen and Toubro Ltd, which
already owns 12 per cent equity in Satyam, and Nasdaq-listed technology
company Cognizant, which was backed by US-based private equity
investor Wilbur Ross, Satyam's board of directors announced at a press
briefing in Mumbai.
• The board of directors, appointed by the government after company
owner Ramalinga Raju admitted to fraudulent accounting of 1 billion
dollars in January, said the acceptance of Tech Mahindra's bid was
subject to approval by India's Company Law Board.
• Tech Mahindra subsidiary Venturbay Consultants Private Limited
offered 58 rupees per share (about 1.16 dollars) for controlling equity,
against 45.90 rupees by Larsen and Toubro and 20 rupees by Cognizant-
wilbur Ross, Satyam board member Kiran Karnik said.
• Shares of Tech Mahindra rose to end at 359.45 rupees, 12.31 per cent
higher than its previous close on the Bombay Stock Exchange.
• Britain's BT Group holds 31 per cent equity in Tech Mahindra. 'Our joint
venture partner BT was incredibly supportive,' Tech Mahindra managing
director Vineet Nayyar told a press briefing.
• Officials of Tech Mahindra, which is a major player in the telecom
sector, said the company had enough resources to meet the immediate
needs of its bid.
• 'The technical capabilities of Satyam are outstanding. Our group will
bring a layering of governance which had gone astray at a time,' Nayyar
said adding that the two companies were complementary.
• Industry analysts said the proposed acquisition would help Tech
Mahindra position itself as a lead player in the IT sector along with TCS
Infosys, Wipro and TCS.
• Mahindra Group chairman Anand Mahindra said the potential of
Satyam and faith in its future had driven his company to bid for it.
• Satyam's scrip jumped by 16.43 per cent during the day's trade but
closed just 3.61 per cent over its previous close at 48.85 rupees.
• The total valuation of 51 per cent controlling equity in Satyam at the
rate of 58 rupees per share works out to 28.89 billion rupees (579 million
dollars).
• Tech Mahindra has to buy a 31 per cent stake in Satyam through a new
share issue and make an offer in the open market for an additional 20 per
cent shares.
• 'Once the CLB approval comes in and Tech Mahindra deposits the
required amount in an escrow account, it will be given management
control of the company,' Karnik said.
• 'The selection of the highest bidder, in a fair, open and transparent
process signals a new stage for the company in its progress towards
stabilization,' Karnik said.
• Acquiring Satyam was a good opportunity for Tech Mahindra to
expand its business, Karnik, a former head of NASSCOM, Indian IT
industry's trade body, added.
• Satyam Computer is India's fourth-largest information technology
services firm and operates in 66 countries. It has 48,000 employees and
counts 185 Fortune 500 companies as its customers.
• A majority of clients had opted to stay with Satyam despite its
problems and the bid offers indicated confidence in the company,
Satyam board member Deepak Parekh, one of India's top bankers, said at
the briefing.
• He said Tech Mahindra was expected to make a payment by April 21.
• Once the bid-winner takes control it would decide how to handle
Satyam's affairs, Parekh said, adding that the only condition was that it
cannot strip the company. 'It cannot break up and sell the company,' he
said.
• The two Satyam campuses and real estate with the company in
headquarters Hyderabad, capital of southern Andhra Pradesh state, was
worth 15 to 20 billion rupees, the officials said.
Trading chart of satyam computer
Last Trade: 5.04
Trade Time: 10:07AM ET
Change: 0.04 (0.79%)
Prev Close: 5.08
Open: 5.03
Bid: N/A
Ask: N/A
1y Target Est: 5.00
1981
• Infosys is established by N. R. Narayana Murthy and six engineers in
Pune, India, with an initial capital of US$ 250
• Signs up its first client, Data Basics Corporation, in New York
1983
• Relocates corporate headquarters to Bangalore
1987
• Opens first international office in Boston, US
1993
• Introduces Employee Stock Options (ESOP) program
• Acquires ISO 9001/TickIT certification
• Goes public
1994
• Moves corporate headquarters to Electronics City, Bangalore. Opens a
Development Center at Fremont
1995
• Opens first European office in the UK and Global Development Centers
at Toronto and Mangalore. Sets up e-Business practice
1996
• The Infosys Foundation is established
1997
• Opens an office in Toronto, Canada
• Infosys is assessed at CMM Level 4
1998
• Starts enterprise solutions (packaged applications) practice
1999
• Touches revenues of US$ 100 million. Listed on NASDAQ
• Infosys becomes the 21st company in the world to achieve a CMM Level
5 certification
• Opens offices in Germany, Sweden, Belgium, Australia, and two
development centers in the US
• Infosys Business Consulting Services is launched
2000
• Touches revenues of US$ 200 million
• Opens offices in France and Hong Kong, a global development center in
Canada and UK, and three development centers in the US
• Re-launches Banks 2000, the universal banking solution from Infosys, as
Finacle™
2001
• Touches revenues of US$ 400 million. Opens offices in UAE and
Argentina, and a Development Center in Japan
• N. R. Narayana Murthy is rated among Time Magazine/CNN's 25 most
influential businessmen in the world
• Infosys is rated as the Best Employer by Business World/Hewitt
2002
• Touches revenues of US$ 500 million
• Nandan M. Nilekani takes over as CEO from N.R. Narayana Murthy,
who is appointed Chairman and Chief Mentor
• Opens offices in The Netherlands, Singapore and Switzerland
• Sponsors secondary ADS offering
• Infosys and the Wharton School of the University of Pennsylvania set up
The Wharton Infosys Business Transformation Awards (WIBTA)
• Launches Progeon, offering business process outsourcing services
2003
• Establishes subsidiaries in China and Australia
• Expands operations in Pune and China, and sets up a Development
Center in Thiruvananthapuram
2004
• Revenues reach US$ 1 billion
• Infosys Consulting Inc. is launched
2005
• Records the largest international equity offering of US$ 1 billion from
India
• Selected to the Global MAKE Hall of Fame
2006
• Infosys celebrates 25 years. Revenues cross US$ 2 billion. Employees
grow to 50,000+
• N. R. Narayana Murthy retires from the services of the company on
turning 60. The Board of Directors appoints him as an Additional
Director. He continues as Chairman and Chief Mentor of Infosys
2007
• Infosys crosses revenues of US$ 3 billion. Employees grow to over
70,000+
• Kris Gopalakrishnan, COO, takes over as CEO. Nandan M. Nilekani is
appointed Co-Chairman of the Board of Directors
• Opens new subsidiary in Latin America
• Reports Q2 revenue of over US$ 1billion
2008
• Infosys crosses revenues of US$ $ 4.18 billion. Employees grow to over
90,000+
• Reports Q4 revenue of US$ 1,142 million
Management team
Srinath Batni
Director and Head, Delivery Excellence
Rama Bijapurkar
Independent Director
K. Dinesh
Director and Head, Communication Design Group,
Information Systems and Quality and Productivity
S. Gopalakrishnan
Chief Executive Officer and Managing Director
Sridhar Iyengar
Independent Director
N. R. Narayana Murthy
Chairman of the Board and Chief Mentor
Deepak M. Satwalekar
Lead Independent Director
T. V. Mohandas Pai
Director and Head, Finnacle, Admin, Human Resources,
Infosys Leadership Institute and Education and Research
Claude Smadja
Independent Director
S. D. Shibulal
Chief Operating Officer and Member of the Board
David L. Boyles
Independent Director
K. V. Kamath
Independent Director
V. Balakrishnan
Senior Vice President and Chief Financial Officer, Infosys
Technologies
Subhash Dhar
Senior Vice President and Head, Global Sales, Alliances and
Marketing
B. G. Srinivas
Senior Vice President, Manufacturing; Product Engineering;
Product Lifecycle and Engineering Solutions, Infosys
Technologies
Chandra Shekar Kakal
Senior Vice President and Global Head, Enterprise Solutions,
Infosys Technologies
Ashok Vemuri
Senior Vice President and Global Head, Banking and Capital
Markets; Strategic Global Sourcing, Infosys Technologies
Amitabh Chaudhry
Chief Executive Officer and Managing Director, Infosys BPO
M. D. Ranganath
Chief Risk Officer, Infosys Technologies
Dheeshjith V. G.
Head, New Markets and Services, Infosys Technologies
Member of the Board, Infosys Technologies, Australia and
Infosys Technologies, China
Subrahmanyam Goparaju
Vice President and Head, Software Engineering and
Technology Labs (SETLabs), Infosys Technologies
Nandita Gurjar
Senior Vice President and Group Head, Human Resources,
Infosys Technologies
Prasad Thrikutam
Senior Vice President and Head, Energy, Utilities and Services,
Infosys Technologies
Director, Infosys China
Suryaprakash K
Vice President, Information Systems, Infosys Technologies
Pravin Rao
Senior Vice President, Retail, Consumer Packaged Goods,
Logistics and Infrastructure Management Services, Infosys
Technologies
Director, Infosys Australia
Jackie Korhonen
Managing Director and Chief Executive Officer, Infosys
Technologies, Australia & New Zealand
Raj Joshi
Director, Infosys Consulting
• It's an ironic twist -- an Indian company shipping tech jobs to the U.S. --
but also a natural evolution, analysts said.
• Executives at Infosys, the second-largest Indian outsourcing firm, told
Dow Jones Newswires in India on Friday that the new subsidiary, called
Infosys Technologies Inc., will pursue government contracts for
information technology that one market research firm estimates will reach
$59.5 billion through 2012.
• "There is a lot of spending happening both at the federal and state levels,"
said chief financial officer V. Balakrishnan. "We don't want to miss that."
• Infosys did not return calls from The Dallas Morning News for additional
comment.
• The company declined to talk about how many people it will be hiring,
but one local analyst said the initial staff will probably number in the
hundreds and grow over time.
• "If you're going to have a service industry in the United States, Dallas is
one of the places you're going to have it," said Peter Bendor-Samuel,
chief executive of Everest Group, a Dallas-based outsourcing consulting
firm.
• He said the region's historic legacy in the outsourcing business -- dating
back to when Ross Perot founded the industry with Electronic Data
Systems Corp. in 1962 -- has produced the skilled workers that
companies like Infosys will need to thrive in the U.S.
• While it may seem odd that Indian firms are migrating some of their work
to the U.S. after years of American companies dispatching jobs to India,
Bendor-Samuel said being in-country is critical for landing government
contracts.
• When it comes to landing health care business, many providers and
federal agencies are reluctant to send that work outside the U.S.
• And the law often requires that defense and homeland security contracts
be handled only by U.S. citizens.
• With growth in their traditional business segments slowing, Indian
companies like Infosys have no choice but to accommodate the
conditions set by the few segments that are growing.
• For example, Tata Consultancy Services, the largest Indian outsourcer,
recently expanded a facility in Cincinnati, while another Indian
outsourcer, Wipro, is hiring hundreds of workers in Atlanta.
Long term implied growth rates rank software near top of industry sectors
Stock-Market Analysis
• Calculate the earnings per share (EPS) of a stock market series and the
expected P/E ratio (earnings multiplier) of a stock market series, using
the series’ expected dividend payout ratio, required rate of return, and
expected growth rate of dividends;
• Estimate and interpret the earnings multiplier of a stock market series,
explain changes in it, and calculate the expected rate of return for a
stock market series;
• Explain how the top-down approach can be used to analyze the
valuation of world stock markets.
Industry Analysis
• Discuss the key components that should be included in an industry
analysis model;
• Illustrate the life cycle of a typical industry;
• Analyze the effects of business cycles on industry classification (i.e.,
growth, defensive, cyclical);
• Analyze the impact of external factors (e.g., technology, government,
foreign influences, demography, and social changes) on industries;
• Illustrate the inputs and methods used in preparing an industry
demand-and-supply analysis;
• Explain factors that affect industry pricing practices.
Competitive Strategy: The Core Concepts
• Analyze the competitive advantage and competitive strategy of a
company and the competitive forces that affect the profitability of a
company and discuss the two fundamental questions determining the
choice of competitive strategy;
• Explain how competitive forces determine industry profitability;
• Analyze basic types of competitive advantage that a company can
possess and the generic strategies for achieving a competitive
advantage, analyze the risks associated with each of the generic
strategies, discuss the difficulties and risks of simultaneously using
more than one of the generic strategies, and discuss the difficulties in
sustaining a competitive advantage with any generic strategy;
• Explain the role of a generic strategy in the strategic planning process.
Company Analysis and Stock Valuation
• Differentiate between 1) a growth company and a growth stock, 2) a
defensive company and a defensive stock, 3) a cyclical company and a
cyclical stock, and 4) a speculative company and a speculative stock;
• Describe and estimate the expected earnings per share (EPS) and
earnings multiplier for a company;
• Calculate and compare the expected rate of return based on the
estimate of intrinsic value to the required rate of return;
• Describe the elements of a franchise P/E;
• Describe how an analyst can use the growth duration model to
determine whether a firm’s P/E ratio is justified and describe the
factors to consider when using the growth duration technique to imply
a company’s P/E.
The Equity Valuation Process
• Define valuation and discuss the uses of valuation models;
• Contrast quantitative and qualitative factors in valuation;
• Discuss the importance of quality of inputs in valuation;
• Discuss the importance of the interpretation of footnotes to accounting
statements and other disclosures;
• Calculate alpha;
• Contrast the going-concern and non-going-concern assumptions in
valuation;
• Contrast absolute valuation models to relative valuation models;
• Discuss the role of ownership perspective in valuation.
Discounted Dividend Valuation
• Discuss the advantages and disadvantages of dividends, free cash
flow, and residual income as measures of cash flow in discounted cash
flow valuation, and identify the investment situation for which each
measure is suitable;
• Determine the circumstances in which a dividend discount model
(DDM) is appropriate for valuing a stock;
• Explain the capital asset pricing model (CAPM), arbitrage pricing
theory (APT), and bond yield plus risk premium approaches for
estimating the required rate of return for an equity investment, and
calculate the required rate of return using each approach;
• Estimate the Gordon growth model equity risk premium;
• Discuss the limitations of using the CAPM and APT to estimate the
required return on equity;
• Calculate the expected holding-period return on a stock, given its
current price, expected next-period price, and expected next-period
dividend and contrast the expected holding-period return to the
required rate of return;
• Discuss the effect on expected return of the convergence of price to
value, given that price does not equal value;
• Calculate the value of a common stock using the DDM for one-, two-,
and multiple-period holding periods;
• Calculate the value of a common stock using the Gordon growth
model, and explain the underlying assumptions;
• Calculate justified leading and trailing price-to-earnings (P/E) ratios
based on fundamentals, using the Gordon growth model;
• Calculate the value of fixed-rate perpetual preferred stock, given the
stock’s annual dividend and the discount rate;
• Calculate the present value of growth opportunities (PVGO), given
current earnings per share, the required rate of return, and the value of
the stock;
• Explain the strengths and limitations of the Gordon growth model, and
justify the selection of the Gordon growth model to value a company,
given the characteristics of the company being valued;
• Explain the assumptions and justify the selection of the two-stage
DDM, the H-model, the three-stage DDM, or spreadsheet modeling;
• Explain the growth phase, transitional phase, and maturity phase of a
business;
• Explain terminal value and discuss alternative approaches to
determining the terminal value in a discounted dividend model;
• Calculate the value of a common stock using the two-stage DDM, the
H-model, and the three-stage DDM;
• Explain how to estimate the implied expected rate of return for any
DDM, including the two-stage DDM, the H-model, the three-stage
DDM, and the spreadsheet model and calculate the implied expected
rate of return for the H-model and a general two-stage model;
• Explain the strengths and limitations of the two-stage DDM, the H-
model, the three-stage DDM, and the spreadsheet model;
• Define sustainable growth rate and explain the underlying
assumptions and calculate and interpret the sustainable growth rate for
a company;
• Estimate, using the DuPont model, a forecast for return on equity that
can be used to estimate a company’s sustainable growth rate.
Free Cash Flow Valuation
• Define and interpret free cash flow to the firm (FCFF) and free cash
flow to equity (FCFE);
• Describe the FCFF and FCFE approaches to valuation, and contrast
the appropriate discount rates for each model and explain the strengths
and limitations of the FCFE model;
• Contrast the ownership perspective implicit in the FCFE approach to
the ownership perspective implicit in the dividend discount approach;
• Discuss the appropriate adjustments to net income, earnings before
interest and taxes (EBIT), earnings before interest, taxes, depreciation,
and amortization (EBITDA), or cash flow from operations (CFO) to
calculate FCFF and FCFE;
• Calculate FCFF and FCFE given a company’s financial statements
prepared according to U.S. GAAP or International Accounting
Standards;
• Discuss approaches for forecasting FCFF and FCFE;
• Contrast the recognition of value in the FCFE model to the
recognition of value in dividend discount models;
• Explain how dividends, share repurchases, share issues, and changes
in leverage may affect FCFF and FCFE;
• Critique the use of net income and EBITDA as proxies for cash flow
in valuation;
• Discuss the single-stage (stable-growth), two-stage, and three-stage
FCFF and FCFE models (including assumptions), and explain the
company characteristics that would justify the use of each model;
• Calculate the value of a company using the single-stage, two-stage,
and three-stage FCFF and FCFE models;
• Explain how sensitivity analysis can be used in FCFF and FCFE
valuations;
• Discuss the approaches for calculating the terminal value in a multi-
stage valuation model;
• Describe the characteristics of companies for which the FCFF model
is preferred to the FCFE model.
Market-Based Valuation: Price Multiples
• Distinguish between the method of comparables and the method based
on forecasted fundamentals as approaches to using price multiples in
valuation, and discuss the economic rationales for each approach;
• Define a justified price multiple;
• Discuss rationales for using each price multiple and dividend yield in
valuation, discuss possible drawbacks to the use of each price multiple
and dividend yield, and calculate each price multiple and dividend
yield;
• Calculate underlying earnings given earnings per share (EPS) and
nonrecurring items in the income statement and discuss the methods
of normalizing EPS, and calculate normalized EPS by each method;
• Explain and justify the use of earnings yield (E/P);
• Discuss the fundamental factors that influence each price multiple and
dividend yield; g) calculate the justified price-to-earnings ratio (P/E),
price-to-book ratio (P/B), and price-to-sales ratio (P/S) for a stock,
based on forecasted fundamentals;
• Calculate a predicted P/E, given a cross-sectional regression on
fundamentals, and explain limitations to the cross-sectional regression
methodology;
• Define the benchmark value of a multiple;
• Evaluate a stock by the method of comparables using each of the price
multiples and explain the importance of fundamentals in using the
method of comparables;
• Calculate the P/E-to-growth ratio (PEG), and explain its use in relative
valuation;
• Calculate and explain the use of price multiples in determining
terminal value in a multi-stage discounted cash flow (DCF) model;
• Discuss alternative definitions of cash flow used in price multiples,
and explain the limitations of each definition;
• Discuss the sources of differences in cross-border valuation
comparisons;
• Describe the main types of momentum indicators and their use in
valuation.
Residual Income Valuation
• Calculate and interpret residual income and describe and calculate
alternative measures of residual earnings (i.e., economic value added,
market value added);
• Discuss the uses of residual income models;
• Calculate future values of residual income, given current book value,
consensus earnings growth estimates, and an assumed dividend payout
ratio and calculate the intrinsic value of a share of common stock
using the residual income model;
• Contrast the recognition of value in the residual income model to
value recognition in other present value models, discuss the strengths
and weaknesses of the residual income model, and justify the choice
of the residual income model for equity valuation, given
characteristics of the company being valued;
• Discuss the fundamental determinants or drivers of residual income;
• Explain the relationship between residual income valuation and the
justified price-to-book ratio based on forecasted fundamentals;
• Explain the relationship of the residual income model to the dividend
discount model and the free cash flow to equity model;
• Discuss the major accounting issues in applying residual income
models;
• Calculate an implied growth rate in residual income, given the market
price-to-book ratio and an estimate of the required rate of return on
equity;
• Define continuing residual income and list the common assumptions
regarding continuing residual income;
• Justify an estimate of continuing residual income at the earnings
forecast horizon, given company and industry prospects;
• Calculate and interpret the intrinsic value of a share of common stock
using a single-stage residual income model;
• Calculate and interpret the intrinsic value of a share of common stock
using a multi-stage residual income model, given the required rate of
return, forecasted earnings per share over a finite horizon, and
forecasted continuing residual earnings.
CONCLUTION
We have already identified the problem in Satyam Computer Services and our
research shows the problem is also present in most of the other business houses
in India. Clearly, the problem is abuse of corporate governance by dominant
shareholder and it can be solved by disciplining the dominant shareholder. The
regulator (the company law administration as well as the securities regulator for
example SEBI) and the capital market can play an important role in preventing
the Satyam scandal happens again.
With time Software export from India was becoming more attractive.
Companies in Indian Information Technology industry were trying to change
their focus to exploit this opportunity. Software opportunities were de-linked
from the hardware manufacturers in 1970 by IBM. Firms that were joint
ventures between Indian counterpart and a foreign hardware technology leader
also realized the software development competence that India had. With large
number of English speaking technical graduates it was easier to make money in
software business in India than hardware business. Especially the Indian
counterpart was more eager to change over to the software service export
business like Tata Unisys. This change in the strategic environment caused by
the technology change was “Radical” in the sense that they made the old skills
and capabilities obsolete and demanded the firms to make substantial
investment for negotiating this change. These changes made the incumbent
firms inefficient and favored new entrants with software export focus. The
change process got delayed in case of joint ventures as changes were not win-
win for both the partners. Incumbent JV firms continued to use second best
solution in the changed environment which was agreeable to both the partners.
They tried to go into software business slowly. In a market place characterized
by high competition these incumbent JV firms started lagging the software
export focused entrant’s performance. These Incumbent JVs either went out of
market or made the investment to negotiate the change very late. By this time
they hade lost the market leadership to the new entrants (Christensen, 1997).
I was supposed to use the database provided by the company to make cold calls
• People fear that Reliance Money Being a Private company and a new
• Misguidance by agents.
• People risk appetite is very low, so they are afraid of mutual fund as well.
SWOT ANALYSIS
Weakness Strength
Based on the findings of our project we would like to suggest the following:-
• After sales services and follow up calls are important for getting new
references so trained telesales should be appointed for this purpose whose sole
account to General Insurance and not all the salespeople are familiar with each
and every product so the work force should be segregated each group dealing in
• While interacting with the investors I found that most of the customers
are unaware about the Mutual fund. Some of the people look upon mutual funds
and equity trading as gambling. Thus a mutual fund awareness program can
• Money multiplier should declare in black ink that they will charge just 5
paisa per transaction. People tend to think that there must be some hidden
charges.
• Rs950 account opening charges are too high when targeting a corporate
Based on the above SWOT analysis and study of the available data I have
HUGE POTENTIAL:
slowly but surely gaining a strong hold because it is finally able to grasp the
can be encouraged and motivated to do good work because they have a long
• The Stock Market has been very buoyant until now especially in the past
means higher returns, which encourages the investors to invest their money in
the market. Although in the past 3 months the market has shown very
• So in order to make the best the only thing required is to recruit more
field staff who should be trained in a proper way to get better results.
associate it with emergencies and unpleasant situations like death and they don’t
want to think about such situation let alone prepare for them, which means it
• People have just opened up to the idea of ULIPs because till now they
knew only two kinds of insurance plans, endowment and term plans so the
concept of high returns with protection is very new to them and slowly and
tapped.
• In the past few years there has been a tremendous inflow of funds in the
Indian market which has lead to the sky rocketing SENSEX. In fact there has
been a tremendous response from the investors not only in shares. Equity
market is an example of the growing trust of investors who earlier shied from
such investments due to stock market fiascos like the Harshad Mehta scam or
the US64 disaster in which investors lost huge amounts of money as well as
• With the FDI limits being relaxed, a lot of avenues will open up in the
insurance sector and insurance companies are expected to come up with new
1. Cold Calling
• The right time to call a customer cannot be decided, as the customer may
• Time consuming
2. Corporate
• Time consuming
1. Preference of Investment
Interpretation: This shows that although the mutual funds market is on the rise
yet, the most favored investment continues to be in the Share Market. So, with a
increased.
online share trading has increased by leaps and bounds. This awareness is
target audience yet, it is to be noted that the customers are not aware of the
facilities provided by the company meaning thereby, that, the company should
concentrate more towards promotional tools and increase its focus on product
broker
Interpretation: This pie-chart corroborate the fact that Strategic
marketing, today, has gone beyond only meeting Sales targets and generating
profit volumes. It shows that all the competitors are striving hard not only to
woo the customers but also to make them Brand loyal by generating customer
satisfaction.
6. Frequency of Trading
Result of Frequency of
Trading
Interpretation: Inspite of the huge returns that the share market promises, we
see that there is still a dearth of active traders and investors. This is because of
the non – transparent structure of the Indian share market and the skepticism of
the target audience that is generated by the volatility of the stock market. It
questionnaire
Yes No
Yes No
Yes No
Q6. What differentiates your Share trading company from others? (in
regards of brokerage, satisfaction, services, products )
Q7. Are you currently satisfied with your Share trading company?
Yes No
Q8. How often do you trade?
a. Reliance money
1. 2. 3. b. ICICI Direct
c. Money Multiplier
d. IL&FS INVESTSMART
4. 5. e. Others (Please
specify)
Q14. What more facilities do you think you require with your DEMAT
account?
Personal
Information
Name :
Age :
Phone No :
Occupation:
bibliography
www.satyam.com
www.humsurfer.com
www.scribd.com
www.whereisdoc.com
www.bseindia.com
www.nseindia.com
www.moneycontrol.com
www.rediff.com/money
www.yahoo.com/finance
www.infosys.com
http://timesofindia.economictimes.com
www.financialexpress.com
www.amfiindia.com
www.equitymasters.com
www.softwarehistory.org
No objection certificate