Mahindra Satyam can now bid for govt deals

IT exporter Mahindra Satyam has been exempted from providing financial statements in bids for government projects enabling the company to participate in tenders called by government units, which have one of the highest IT spends in the domestic market. A majority of these tenders require the financial statements of the bidder to be provided as prerequisite.

Mahindra Satyam’s financials are in the process of being restated after its promoter and former chairman, Ramalinga Raju, confessed to falsifying the accounts in January this year. After the scam-hit company was taken over by Tech Mahindra, the board under the chairmanship of Kiran Karnik had sought an exemption from providing its financials, so it could be eligible to bid for government projects.

Satyam has so far lost out on a Railways contract estimated at Rs 100 crore, with the opportunity to more effectively participate in future contracts worth Rs 3,000 crore. It also lost out an enterprise resource planning implementation contract from BSNL for around Rs 250 crore to rival, HCL Infosystems.

“This directive, along with the Mahindra & Mahindra balance sheet, will help us participate in tenders by government departments and PSUs. The directive says the audited financials should not be a point of contention and we (Satyam) should be considered based on our technical proficiency,” a highly placed Mahindra Satyam official told ET.

However, the company is not likely to contest those bids that it has already lost out to rivals. “Earlier, we were not even being invited for bidding — now at least we will be able to participate in them. But there may be still some government contracts where we cannot participate if there are other criteria,” the official said.

The firm is currently participating in around 15-20 bids from public sector undertakings and government departments, said Sanjay Venkatraman, who heads the India business unit at Mahindra Satyam.

“These projects range from Rs 20 crore to Rs 100 crore and are in the areas of e-governance and citizen services,” Mr Venkataraman added.

The exemption from the ministry of corporate affairs is valid only till December this year and since the restatement of accounts are expected to take up to March, Mahindra Satyam is likely to apply for the exemption to be extended till that date. The company has created a separate division under its India business unit to focus on government projects.

Mahindra Satyam lost a Railways contract estimated at Rs 100 crore, with the opportunity to more effectively participate in future contracts worth Rs 3,000 cr.

It also lost out an enterprise resource planning implementation contract from BSNL for around Rs 250 crore to HCL Infosystems.

Mahindra Satyam is currently participating in around 15-20 bids from public sector undertakings and government departments.