The international PEs and names like HP and IBM have been in news recently for being possibly interested in buying or taking position in the IT firm, Satyam.

But now, it looks like the company might have domestic suitors as well.

NDTV has learnt that Tech Mahindra is keen on picking up a stake in Satyam and interestingly is even exploring a merger option. 

Well, there may be reasons enough for this, as the company is looking forward to a chance for graduating from a niche telecom solutions provider to a full fledged IT company and Satyam could provide that opportunity.

Well, joining hands with Satyam will help Tech Mahindra to expand into the lucrative non-telecom space like SAP, BFSI and auto and at the same time reduce its dependency on British Telecom from which it earns over 60 per cent of revenue.

BT holds 31 per cent stake in Tech Mahindra and has been looking for an exit option as well.

 Milan Sheth, Partner, Advisory Services, Ernst&Young, said, “It’s difficult for companies like Tech Mahindra to grow into new domains overnight since they are so niche focused.”

However, it’s too early for such moves. Tech Mahindra will have to deal with the institutional investors and are waiting until the board restructures.

After all, institutions hold an overwhelming 76 per cent stake in Satyam.

There are many options—bringing in a professional manager or a PE player being one.

Meanwhile, sources say that a cash transaction is unlikely and so a share swap option works better.

Satyam is near about four times Tech Mahindra's net worth and three times in terms of market cap and all that has to be factored in for any deal to proceed.

Now, the plot is set and the January 10th deadline is round the corner.

But any deal will be complicated with a low promoter holding, corporate governance issues and the stock getting hammered.

However, a strong strategic intent will drive the deal home.