TCS prices IPO at Rs 775 to Rs 900 a share

Denny Thomas and Anirban Nag

MUMBAI: Tata Consultancy Services Ltd., India's largest software services exporter, set a price band of 775 rupees to 900 rupees a share for its initial public offering, setting it on course to launch the nation' biggest IPO.

The issue would raise up to 57.4 billion rupees ($1.2 billion) at the top end of this band, which would make it India's biggest IPO and make Tata Consultancy the country's third-largest company by market value.

Merchant banking sources said the IPO would open on July 29, 2004 and close on August 5, 2004. A spokesman for the company said it had indicated the price band in its filing with the registrar of companies, but was still to decide on the date.

"The price is right for the issue to sell in this market," said Gurunath Mudlapur, head of research at local brokerage Khandwala Securities. "It will be oversubscribed at least three to four times. Retail investors will also participate."

Tata Consultancy Services (TCS) is part of the Tata empire, India's second-largest business group by sales.

The IPO of up to 63.75 million shares is a combination of a fresh issue and an offer for sale by existing shareholders, together accounting for 13 percent of the enlarged capital base. The price will be set through book-building.

The basic issue size is 55.45 million shares, and there is a greenshoe option for 8.3 million shares. Nearly 54 percent will be reserved for institutional buyers while 22 percent will be set aside for retail investors.

Tata Consultancy filed a draft prospectus last month with the capital market regulator. It has now filed a final prospectus with the registrar of companies, which merchant bankers said is likely to approve the filing soon.

"The roadshow is likely to begin in Bombay(Mumbai) on Thursday," said one merchant banking source, who declined to be identified.

"It will cover London and New York."