Satyam chairman and co-founder B. Ramalinga Raju revealed that the company was involved in a fraud of about Rs.40 billion ($823 million) over several years.The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was down 7.25 percent or 749.05 points to 9,586.88 points after opening higher than the Tuesday’s close of 10,335.93 points.
The Satyam scrip took a sharp dip losing 77.69 percent of its value to close at Rs.39.95 over its close Tuesday of Rs.179.10. A total of 14,30,09,827 shares of the troubled software company changed hands in Wednesday’s trade.
At the same time, the broader S&P CNX Nifty index of the National Stock Exchange (NSE) was trading at 2,920.4 points, 6.18 percent lower.
Other market indices like the midcap and small-cap indices fell by as much as the Sensex. BSE midcap index was trading 7.17 percent, while the small-cap index fell 6.29 percent.
“Satyam has indeed dented investor and business confidence with this new revelation,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.
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