TCS' strong stock market debut boost investor mood

Wednesday, 25 August 2004, 07:00 Hrs
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NEW DELHI: The sentiment of India's jittery share investors received a major boost Wednesday after stocks of bellwether IT firm Tata Consultancy Services (TCS) made its market debut on an impressive note.

Stocks of TCS, India's biggest software company, started trading on the Bombay Stock Exchange (BSE) Wednesday at 1,050, registering a jump of 24 percent over its offer price of 850 per share.

After rising as much as 1,080 in the early trade, shares of TCS came down to 986 in the noon session, with select investors rushing to book profit at higher levels.

"The stock market debut of TCS at 1,050 met with the street expectations. We were expecting it to open at that level only," said Neeraj Deewan, an equity market analyst with Quantum Securities.

"Although the counter witnessed some profit taki1ng at higher levels, the outlook continues to be very bullish. I think after coming tad lower from this point, TCS stocks will again stage a sharp rally," Deewan told IANS.

At the current valuation, TCS has become the third largest Indian company by market capitalisation on the benchmark BSE after state-run Oil and Natural Gas Corp and the country's largest business house Reliance Industries.

The initial public offering (IPO) of TCS, India's biggest IPO ever by a private company at $1.2 billion, was subscribed over seven times the size of the issue.

The country's top software firm had launched a one-week public offering period earlier this month, floating 55.4 million shares, or 13 percent of the company's equity, at a price range of 775-900 per share.

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.

Source: IANS
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