B.Ramalinga Raju - India Economic Summit 2008Image by World Economic Forum via Flickr

Two thousand crores. This is the amount this Government is mulling to throw it on Satyam. This decision is based on three assumptions.

  1. Satyam would retain it’s customers after Government’s actions ( Nice day dream : After all these Fortune 500 companies need to answer their shareholders)
  2. Satyam would be able to recover it’s lost cash reserves and future receivables. ( Some Possibility)
  3. Satyam is a isolated case. No other Indian company would report the same problem ( I expect atleast 10-15 cases if we pursue this matter proactively)

I leave the validity of the above three assumptions to the wisdom of readers. This decision might be seen as a historic blunder. It is not fair also.

Government's infusion of capital would be boost the sentiment of Satyam stock and arrest the short term value erosion. But long term outlook remains bleak. Investors should vaoid any exposure. Traders can trade. It seems luck is on trader's side. God bless Poor India. Dr.Manmohan singh may regret this decision later.

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