Relisting on the New York Stock Exchange (NYSE) for Mahindra Satyam will not be a cakewalk at all. A clean image and a new brand positioning are the prime and demanding factors for the company to consider when it decides to go for relisting. Even after fulfillment of US GAAP norms, which is expected to happen in another six to eight months, relisting can be an option once the merger process with Tech Mahindra is completed for better brand image to regain investors confidence.?
Analysts feel that meeting the guidelines and the processes will be major deterrents even while it has to take care of a series of class action suits as part of confidence-building measures. According to Vineet Nayyar, chairman, Mahindra Satyam, preliminary motions have been moved and it may take another two to three years in addition to the time taken already for a resolution of these class action suits.
Industry experts feel that the company has to focus on reincarnation as brand image in the overseas markets have to be further improved. ?Thanks to the FIFA deal, the company?s logo and brand is flying in good colours but there are other legal challenges which have to be take care of,? an analyst said.
Relisting would involve roadshows across geographies for which a clean and strong brand image has to be portrayed to regain market confidence. On the other hand, industry watchers and analysts feel that the actual position of the company would come clear after the quarter results ,which are expected to be announced on November, 15. ?The actuals will be reflected in the quarterly results which will focus on the matrix, newer verticals, utilisation ration, operating parameters, among others, which did not come out clean in the restatement of accounts,? said Shrishti Anand, IT, Angel Broking.
As the scam-hit Mahindra Satyam takes its final decision on relisting on the New York Stock exchange (NYSE) once its completes the US GAAP accounting standards, analysts and industry watchers are apprehensive whether it can meet the different procedures on time and go for relisting. Vineet Nayyar, chairman, Mahindra Satyam said, ?We are hopeful of becoming US GAAP-compliant in the next six to eight months. Currently, we want to become complaint with the Indian accounting system which is also equally vigorous. After that, we will decide whether we want to relist on NYSE or go for OTC.?? Mahindra Satyam has decided to delist its American Depositary Receipts (ADRs) from NYSE on October 14 as it is unable to meet US market financial norms.
However, analysts and industry watchers are wary of the company?s plan to meet the deadline for US GAAP. ?Six to seven months seem a difficult time-frame keeping in mind the complicated process. However, since the company has managed to file the restatement of accounts on time, we are optimistic that it might meet it,? said an analyst with Motilal Oswal.