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TCS public offer seen lifting India's market sentiment
Friday, 11 June 2004, 19:30 IST
NEW DELHI: Buoyed by the upcoming share sale of IT firm Tata Consultancy Services (TCS), a host of Indian companies are expected to rekindle investor appetite in a sagging stock market.
TCS, India's largest software exporter, Thursday took a step closer to floating initial public offering (IPO), widely expected to be the largest in the history of the domestic capital market, by filing draft prospectus with the market regulator.
Analysts say companies, especially software makers, which were postponing their public offering plans in recent years due to depressed market conditions, may revive the process on TCS' decision.
"TCS' decision to launch its public offering despite lacklustre trading pattern on the bourses comes as a major boost to the capital market," said K.K. Mittal, vice president of Escorts Mutual Fund.
"The decision will tempt many private companies to revive the plans of going public to raise funds. The market has enough appetite for quality issues despite the recent sell-off," Mittal told IANS.
In the April-January period of the current fiscal, only 16 public issues were launched in the market that raised a meagre 
25.15 billion ($555.67 million), says New Delhi-based market research firm Prime Database.
TCS, an arm of Tata Group, one of India's biggest business conglomerates, Thursday filed prospectus for its much-awaited public offering of shares with the capital market watchdog Securities and Exchange Board of India (SEBI).
TCS could raise a whopping 50-60 billion from the sale of a 10-15 percent stake in Asia's largest software services company, making it the largest public offering to hit the Indian markets.
"We have taken one more step towards floating the IPO by filing the draft prospectus with SEBI," said Atul Takle, vice president (corporate communications) of TCS.
"SEBI has 21 days to reply to the prospectus after which we will take a decision on the timing of the launch of the public offering. The time of the float will depend on market conditions," he added.
Banking sources familiar with the issue, however, say the IPO could hit the market as early as July end.
The Indian stock market has been trading within a close range for the last few days in the absence of any positive buying trigger.
The market witnessed a bloodbath last month as investors fretted over a possible socialist tinge in the economic agenda of the new government, which has the Left parties backing it from outside.
TCS is a division of Tata Sons, the holding company of the $13-billion Tata Group that has a presence in a wide spectrum of industrial sectors including automobile, steel and telecommunications.
It has become hugely profitable and carved out a niche for itself in the competitive global technology market after it started out by writing software code for its parent company in 1968.
Analysts said TCS' public listing would not only come as a major boost to the country's IT industry but also help the company achieve global visibility in the years ahead.
"The IPO will provide an opportunity for Tata Sons and its shareholders to realise the value of their holdings through sale of their shares after TCS gets listed," said an analyst with a domestic brokerage firm.
TCS became India's first billion-dollar software firm in revenues last year. Its revenues for the fiscal ended March 31, 2003, touched 50.12 billion ($1.04 billion), up from 41.87 billion in fiscal 2001-02.
The company manages projects for over 1,000 clients in more than 55 countries and employs nearly 28,000 software professionals across the globe.
Source: IANS
25.15 billion ($555.67 million), says New Delhi-based market research firm Prime Database.
TCS, an arm of Tata Group, one of India's biggest business conglomerates, Thursday filed prospectus for its much-awaited public offering of shares with the capital market watchdog Securities and Exchange Board of India (SEBI).
TCS could raise a whopping 50-60 billion from the sale of a 10-15 percent stake in Asia's largest software services company, making it the largest public offering to hit the Indian markets.
"We have taken one more step towards floating the IPO by filing the draft prospectus with SEBI," said Atul Takle, vice president (corporate communications) of TCS.
"SEBI has 21 days to reply to the prospectus after which we will take a decision on the timing of the launch of the public offering. The time of the float will depend on market conditions," he added.
Banking sources familiar with the issue, however, say the IPO could hit the market as early as July end.
The Indian stock market has been trading within a close range for the last few days in the absence of any positive buying trigger.
The market witnessed a bloodbath last month as investors fretted over a possible socialist tinge in the economic agenda of the new government, which has the Left parties backing it from outside.
TCS is a division of Tata Sons, the holding company of the $13-billion Tata Group that has a presence in a wide spectrum of industrial sectors including automobile, steel and telecommunications.
It has become hugely profitable and carved out a niche for itself in the competitive global technology market after it started out by writing software code for its parent company in 1968.
Analysts said TCS' public listing would not only come as a major boost to the country's IT industry but also help the company achieve global visibility in the years ahead.
"The IPO will provide an opportunity for Tata Sons and its shareholders to realise the value of their holdings through sale of their shares after TCS gets listed," said an analyst with a domestic brokerage firm.
TCS became India's first billion-dollar software firm in revenues last year. Its revenues for the fiscal ended March 31, 2003, touched 50.12 billion ($1.04 billion), up from 41.87 billion in fiscal 2001-02.
The company manages projects for over 1,000 clients in more than 55 countries and employs nearly 28,000 software professionals across the globe.
Source: IANS