Satyam has ceased to exist as a legal entity, Vineet Nayyar, executive vice chairman of Tech Mahindra told NDTV post the merger of the two companies.

"We will now have only one company, which is Tech Mahindra," Mr Nayyar said.

Tech Mahindra had purchased Satyam in a government-backed auction in 2009 after the founder of the Hyderabad-based company admitted to one of India's biggest accounting frauds. On Tuesday, the two merged after clearing all legal and financial hurdles to become India's 5th largest IT services provider by revenues.

Tech Mahindra owns close to 43 per cent of Satyam and is offering one share in itself for every 8.5 shares of Satyam to absorb the company. A date for recording the exchange is yet to be set.

There's speculation that the combined entity will strive to grow aggressively to take on the established players in the Indian IT industry. Some traders told NDTV that with a free float market capitalization of nearly Rs 15,000 crore, Tech Mahindra may soon be a part of the Nifty-50 benchmark.

Tech Mahindra will be looking at acquisitions that serve a "strategic purpose," Mr Nayyar said, but there will be no acquisition for "bulking." The company has 2.4 crore treasury shares besides cash reserves of $700-800 million to fund acquisitions.

Treasury stock can give us instant liquidity and one the functions of the stock would be to secure the liquidity if we are looking at a large acquisition, Mr Nayyar said

Tech Mahindra has also resolved most of the issues pertaining to Satyam.

"The cash on the balance sheet is net of the payments... we have paid to Aberdeen, resolved the class action suit, settled with the US Securities and Exchange Commission... all that is done and dusted," Mr Nayyar said.

The only liabilities are the ones related to the income tax and enforcement directorate, he added.

"The IT department wants us to pay tax on fictious income, on income which never existed. I am not taking that demand as serious demand... yes, there will be litigation, but we will prevail," Mr Nayyar said.

The increase in scale means Tech Mahindra's reliance on big clients such as British telecom group BT will come down.

"In absolute terms, our business is coming down but in terms of share of wallet our business is going up... they will not be a significant part of our portfolio and that will give the company a greater stability," Mr Nayyar said.

BT, which once owned about a third of the company, has been gradually paring its stake in Tech Mahindra, and with its stake sale on Tuesday it will exit the outsourcing services provider.

Shares in Tech Mahindra traded 3 per cent higher at Rs 1,040, while Satyam traded 3.7 per cent higher at Rs 120.30 as of 1.49 a.m. The two stocks outperformed the broader BSE IT benchmark, which advanced 1.5 per cent.