Rolta falls prey to rumours

15 January 2009

The Satyam fiasco has had an unintended fallout for even other respected IT firms in the country. After doubts about Wipro that hammered its shares (See: Wipro among 111 global firms debarred by World Bank), now GIS speacilist Rolta seems to have hit a rough patch.

The market has been flooded with speculation, rumours and questions about the veracity of the financial well-being of other IT companies.

Rolta India is one of India's leading IT companies, specialising in geospatial information systems (GIS), engineering design services (EDS) and enterprise information and communications technology (EICT).

The shares of the company sank nearly 60 per cent in intra-day trading as rumours swirled that lenders were dumping pledged shares, an eerie reminder of Satyam's first brush with trouble.

Rolta shares hit an intra-day low of Rs42.40, down steeply from the opening trade of Rs107.90. There were reports that Goldman Sachs, which holds 3.5 per cent of the stock, had been selling the shares, while Merrill Lynch sold around 10 lakh Rolta shares at Rs68.41 on the NSE.

It is learnt that around 2.5 per cent of the company's equity has been pledged with various nationalised and private sector banks.