IT major Satyam Computer on Wednesday fell to its lowest level in over a decade to Rs 48.90, nosediving as much as 73 percent, following the resignation of company's Chairman B Ramalinga Raju and revelation of malpractices in the firm's accounting methods.
Shares of Satyam plunged as much as 72.70 percent to a low of Rs 48.90, but was later trading at Rs 50, down 72.08 percent in the afternoon trade on the BSE.
The scrip, which had opened at Rs 179.10, plunged within minutes of Satyam Chairman and Managing Director tendering their resignation.
Analysts believe investor confidence has shattered completely as the company was operating its business based on entirely false balance sheet.
"The Satyam case is entirely disastrous and the investors have been completely misguided and misled. People will not think more in the company as some more frauds may be revealed in the near future," Ashika Stock Brokers' Research head Paras Bothra said.
Ramalinga Raju, who had been under attack over the 1.6-billion-dollar acquisition fiasco of firms promoted by his family, on Wednesday resigned as Satyam Chairman after admitting to major financial wrong doings and saying his last-ditch efforts, to fill the "fictitious assets with real ones" through Maytas acquisition, failed.
The counter saw frantic selling on the bourses after the news broke out, and nearly 27 crore shares had changed hands on both the bourses till the afternoon trade.
Satyam stock holds a 1.56 percent weight in the 30-share bluechip index Sensex. Following the same, the benchmark index also plunged over 400 points and was trading down nearly 4 percent at 9,922 points in the noon trade on the BSE.
The scrip has revisited the Rs 49 levels after a gap of nearly 12 years, as in March, 1997 the stock had been around Rs 49.75.
The resignations, ahead of the 10th January board meeting, has pushed the company into crisis and paved way for immediate restructuring of the board and the management.
On the National Stock Exchange, the scrip plunged 72.59 percent to an intra-day low of Rs 49.05. It was later quoted at Rs 50.80, down 71.61 percent in the afternoon trade.
Satyam's American Depository Receipts, listed on the New York Stock Exchange, had closed up four percent at 9.35 dollar on Tuesday, and are expected to witness a sharp plunge when the American markets open.
"The ADRs are likely to cues from the domestic market and may plunge as much as 80 per cent, as the investors know that the company's fundamental have been completely shaken and their confidence has been totally shattered," Arun Kejriwal director of Kejriwal Research and Investment Services said.
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