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Now Indian market to see a slew of IPOs
Friday, 06 August 2004, 19:30 IST
NEW DELHI: Enthused by the impressive investor response to the share sale of IT sector bellwether Tata Consultancy Services (TCS), a slew of Indian firms are expected to rekindle investor appetite in the days ahead.
Analysts say companies, especially software and telecom firms, which were postponing their public offering plans in recent months due to uncertain market conditions, may revive the process on TCS' success.
The initial public offering (IPO) of TCS, projected to be India's biggest IPO ever by a private company at $1.2 billion, was subscribed over six times the size of the issue as the bidding process ended Thursday.
The country's top software firm had launched a one-week public offering period, floating 55.4 million shares, or 13 percent of the company's equity, at a price range of 
775-900 a share.
"The massive investor response to TCS public offering despite cautious trading sentiment on the bourses comes as a major boost to the capital market," said K.K. Mittal, vice president of Escorts Mutual Fund.
"The outcome of TCS IPO will tempt many companies to revive the plans of going public to raise funds. The issue has clearly shown that the market has enough appetite for quality issues," Mittal told IANS.
"The large-scale demand for TCS shares is also an indication of the confidence that individual investors, non-resident Indians and foreign funds have in the Indian market."
The share sale of TCS, an arm of Tata Group, one of India's biggest business conglomerates, received participation from retail investors that was around three times more than the stocks on offer.
Institutional portion was oversubscribed by about 7.5 times while the portion reserved for high net worth individuals was oversubscribed by about 11-12 times.
Banking sources familiar with the issue say the issue would be priced on towards this weekend.
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.
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.
Analysts said TCS' public listing would not only help the company achieve global visibility in the years ahead but also come as a major boost to the country's IT and telecom industry.
"The Indian primary market has now become a very attractive source of raising funds for domestic as well as the local arms of many overseas companies," said Sanjeev Khandelwal, director of New Delhi-based Prime Database.
According to Prime Database, a primary market research firm, six companies have already got the approval of market regulator for floating public offering while as many as 13 firms have filed documents for it.
In the April-July period of the current fiscal year, only six public issues were launched in the market that raised a meagre 87.03 billion, says Prime Database.
"With the economy on a sustained growth path and most of the industrial sectors, including software and telecom, showing signs of robust growth, the time is just right for tapping the market," said Khandelwal.
India's economy expanded by a blistering pace of 8.2 percent in the financial year ended March 31, 2004, making it Asia's third largest economy's best performance in the last 15 years.
Source: IANS
775-900 a share.
"The massive investor response to TCS public offering despite cautious trading sentiment on the bourses comes as a major boost to the capital market," said K.K. Mittal, vice president of Escorts Mutual Fund.
"The outcome of TCS IPO will tempt many companies to revive the plans of going public to raise funds. The issue has clearly shown that the market has enough appetite for quality issues," Mittal told IANS.
"The large-scale demand for TCS shares is also an indication of the confidence that individual investors, non-resident Indians and foreign funds have in the Indian market."
The share sale of TCS, an arm of Tata Group, one of India's biggest business conglomerates, received participation from retail investors that was around three times more than the stocks on offer.
Institutional portion was oversubscribed by about 7.5 times while the portion reserved for high net worth individuals was oversubscribed by about 11-12 times.
Banking sources familiar with the issue say the issue would be priced on towards this weekend.
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.
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.
Analysts said TCS' public listing would not only help the company achieve global visibility in the years ahead but also come as a major boost to the country's IT and telecom industry.
"The Indian primary market has now become a very attractive source of raising funds for domestic as well as the local arms of many overseas companies," said Sanjeev Khandelwal, director of New Delhi-based Prime Database.
According to Prime Database, a primary market research firm, six companies have already got the approval of market regulator for floating public offering while as many as 13 firms have filed documents for it.
In the April-July period of the current fiscal year, only six public issues were launched in the market that raised a meagre 87.03 billion, says Prime Database.
"With the economy on a sustained growth path and most of the industrial sectors, including software and telecom, showing signs of robust growth, the time is just right for tapping the market," said Khandelwal.
India's economy expanded by a blistering pace of 8.2 percent in the financial year ended March 31, 2004, making it Asia's third largest economy's best performance in the last 15 years.
Source: IANS