TCS to go public next month

By SiliconIndia   |   Wednesday, 21 April 2004, 07:00 Hrs
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MUMBAI: One of India's top software services companies, Tata Consultancy Services (TCS), will file for what could be the nation's largest IPO next month, according to sources.

"TCS has not yet decided on the issue size, but it is expected to raise between 35 billion and 40 billion rupees ($800-$913 million) through an initial public offering (IPO) of about 10 percent of its equity," a banker was quoted as saying by a news agency.

The much-anticipated IPO would value TCS at a whooping $9.1 billion, catapulting it to India's fourth-most-valuable company by market capitalization.

"The papers are likely to be filed by early-to-mid May," one banker told on the condition of anonymity to the agency. Many market analysts are certain that TCS would go for the IPO next month, considering the moves of the company in the last couple of months.

It's expected that the TCS IPO would surpass Reliance Industries' $690 million raised in 1993.

Quoting bankers, the agency said TCS was keen not to miss this opportunity after missing its chance to float during the late 1990s tech boom.

TCS and its subsidiaries employed some 30,000 workers at the end of 2003, more than the 26,500 Infosys Technologies, the second-largest software exporter, had on its rolls in March.

Analysts said TCS clocked revenues of about $1.5 billion for the year to March 2004, with a net margin of about 20 percent.

Merchant bankers said DSP Merrill Lynch, JM Morgan Stanley and JP Morgan are likely to win the mandate as the TCS IPO's lead managers. The issue could hit the market by June or early July, subject to regulatory approvals, they added.

However, the agency said that the Tata group had declined to comment on the matter.

It is expected that Kotak Mahindra, HSBC Securities and ICICI Securities will co-lead manage the TCS issue.

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