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TCS to offer 5.54 cr shares via IPO

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Last updated on: June 10, 2004 20:32 IST

India's largest information technology company Tata Consultancy Services Ltd will offer 5.54 crore (55.4 million) equity shares of Re 1 each, including a fresh issue of 2.27 crore (22.7 million) shares, in its initial public offering through a book-building route.

The issue also comprises offer for sale of 3.26 crore (32.6 million) shares by Tata Sons Ltd and certain other shareholders of TCS, and a further greenshoe option by Tata Sons for 831,000 shares each, according to the draft red herring prospectus filed with the Securities and Exchange Board of India on Thursday.

The company had a turnover of over Rs 7,000 crore (Rs 70 billion) in FY04 with a net profit in excess of Rs 1,800 crore (Rs 18 billion), investment banking sources told PTI.

The offering of 7.17 per cent stake is from existing shareholders like Tata Sons, Indian Hotels Ltd, and Jamsetji Tata Trust.

The exact size of the offer would be known only after the bidding price band is announced even as the market sources estimate the size to be in the range of Rs 4,000-5000 crore (Rs 40-50 billion).

The IPO would consist of 4.99 crore (49.9 million) shares, including 2.99 crore (29.9 million) to Qualified Institutional Bidders, 74.86 lakh (7.49 million) to non-institutional bidders (high networth individuals), and 12.47 lakh (1.25 million) to retail bidders, it said.

The company has reserved 55.45 lakh (5.54 million) shares for employees of TCS Division, TCS Ltd and Tata Sons.

The net proceeds of the fresh issue of shares would be used to pay the purchase consideration to Tata Sons for the transfer and the remaining proceeds would be deployed for general corporate purposes.

The authorised share capital of the company is Rs 60 crore (Rs 600 million) and the current paid up capital is Rs 45.55 crore (Rs 4.55 million). The equity capital after the offer would be Rs 47.83 crore (Rs 4.78 million), according to the prospectus.

Tata Sons is offloading 3.17 per cent of pre-offer capital [1.44 crore (14.4 million) shares] followed by Jamsetji Trust 2.09 per cent [95.31 lakh (9.53 million)], Navajbai Ratan Trust 1.2 per cent (546,000), Shapoor Pallonji Mistry and Cyrus Pallonji Mistry 0.28 per cent each [12.61 lakh (1.26 million)].
Kalimati Investment Company Ltd is offloading 0.09 per cent (413,000 shares), Indian Hotels Company Ltd 0.04 per cent (200,000) and Camco Investment and Finance Ltd 0.02 per cent (83,231).

Tata Sons has agreed to transfer the green shoe option shares to the stabilising agent to be used to avoid volatility in the company shares.

The issue is to be listed on Bombay Stock Exchange and National Stock Exchange India Ltd.

The book running lead managers are J M Morgan Stanley Pvt Ltd, DSP Merrill Lynch and J P Morgan (India) Pvt Ltd. Karvy Computershare Pvt Ltd would be the registrar to the issue.

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