Shares in fraud-hit Satyam Computers rebounded more than 50 percent in early trade yesterday on investor confidence in the new government-installed board, dealers said.
The company’s stocks rose 12.7 rupees, or 53.25 percent, to 36.55 rupees on the same day the Mumbai stock exchange removed the company from the benchmark 30-share Sensex index in reaction to a billion-dollar accounting scandal.
Satyam shares were in freefall last week, closing at 23.85 rupees on Friday compared with a value of around 180 rupees before the scandal broke.
“The stock had been battered ... there is hope that the new board would help improve fortunes for the company,” said Advait Date, a dealer with brokerage BHH Securities.
Indian authorities on Sunday appointed three prominent business leaders to run the software giant in an effort to salvage the country’s international business image.
The government appointees replaced Satyam’s own interim board of directors who took charge after founder and chairman B. Ramalinga Raju admitted his company’s accounts and assets had been falsified.
Meanwhile, Satyam will have to restate earnings and may be broken up after the company’s founder was arrested in India’s biggest corporate fraud investigation, executives said.
Three new directors led by Housing Development Finance Corp. chairman Deepak Parekh are meeting in Hyderabad today to take over India’s fourth-largest software exporter after the government replaced its board and detained chairman Ramalinga Raju.