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TCS IPO likely to be of Rs 7,000 cr</

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CIOL Bureau
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MUMBAI: Tata Consultancy Services (TCS) has filed the draft prospectus for its much-awaited initial public offering (IPO), with the Securities and Exchange Board of India (SEBI). Sources disclosed that the company is looking to go public sometime in July. The total amount which is expected to be raised through the issue is said to be in the range of Rs 6,000 crore -Rs 7,000 crore.





Tata Sons director Inshaat Hussein, though confirmed the filing of the draft prospectus at SEBI refused to divulge anything about the time frame and said that the prospectus is a step towards the IPO and the launch would depend on stock market conditions.





The company’s main promoter, Tata Sons and its group companies like Tata Motor, Tata Power, various Tata Trusts and construction baron Shapoorji Pallonji are expected to dilute their holding in TCS through the book building public issue by offering around 14 percent of its equity shares to local and foreign investors through a book-building issue in the domestic market.





A total of 6.3 crore shares of face value of Rs one will be on sold. Of the 6.3 crore shares, the number of new equity shares is 2.27 crore. Excluding the green-field option of .8 crore, of the 5.54 crore shares on offer, 4.99 crore shares will be offered to retail investors, high net worth investors and qualified institutional buyers. TCS employees are expected to be allotted around 55 lakh shares. The total equity capital of the company consists of 45.5 crore shares, which would be increased to 47.83 crore post IPO.



TCS is expected to cross Rs 7,000 crore mark in 2003-04. The post-issue valuation of the company could be around $10 billion. The exact valuation would depend on the final pricing. It is also expected that TCS is likely to be de-merged and corporatized as an independent entity contingent upon the IPO. The Bombay High Court has already approved the scheme of arrangement between Tata Sons and TCS, which will result in transfer of the division to Orchid Prints that has been renamed as TCS Ltd.





The IPO would provide an opportunity for Tata Sons and its shareholders to realize the value of their holdings through the sale of their shares after TCS gets listed. DSP Merrill Lynch, JM Morgan Stanley, JP Morgan, and Kotak Mahindra Capital Company are likely to be the lead-managers for the IPO.



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