Larsen & Toubro Ltd.

Larsen & Toubro, which recently increased its stake in Satyam Computer to 12%, believes that “significant value” is embedded in the scam-stung IT firm, amidst reports that the engineering firm is mulling a further increase in Satyam stake.
Going forward, L&T will continue to examine the situation closely before taking any further steps. L&T maintains high standards of corporate governance and could play an effective role, if required, in preserving the interest of Satyam’s various stakeholders.
Explaining the rationale for increasing the stake to 12 per cent, Mr Naik said L&T believed that some “corporate action” could take place and hence it acquired the additional stake (of 8 per cent) to protect its interests and its initial investment without assuming any management role in the troubled IT Company. 
After the sensational disclosure by the disgraced founder of Satyam, Mr B. Ramalinga Raju, L&T did not purchase any shares until January 23, when in two block deals it increased its stake from 4 per cent to 12 per cent. The average cost post-increased stake is around Rs 80 a share. 
While it could take some time to assess the financial implication of the (Satyam) situation, including the class action suits filed in the US courts, L&T believes that only its investments in Satyam’s equity shares would be at risk. Considering that the amount invested (in Satyam) is around 5 per cent of the company’s (L&T) networth, L&T is of the opinion that it has taken a calculated risk which has the potential to create meaningful shareholder value.