TCS Files IPO Prospectus with SEBI

Tata Consultancy Services (TCS) has filed the draft prospectus for its

much-awaited initial public offering (IPO), with the Securities and Exchange

Board of India (SEBI). Sources disclosed that the company is looking to go

public sometime in July.

Inshaat Hussein, Director, Tata Sons though confirmed about the draft

prospectus being filed at SEBI but refused to divulge anything about the time

frame and said that the prospectus is a step towards the IPO and the launch

would depend on stock market conditions. The company's main promoter Tata Sons

and group companies like Tata Motor, Tata Power, various Tata Trusts and

construction baron Shapoorji Pallonji are expected to dilute their holding in

TCS through the book building public issue by offering around 14 percent of its

equity shares to local and foreign investors through a book-building issue in

the domestic market. A total of 6.3 crore shares of face value of Rs 1 will be

on sold. Of the 6.3 crore shares, the number of new equity shares is 2.27 crore.

TCS employees are expected to be allotted around 55 lakh shares. The total

equity capital of the company consists of 45.5 crore shares, which would be

increased to 47.83 crore post IPO. The total amount which is expected to be

raised through the issue is said to be in the range of Rs 6,000 Rs 7,000 crore.

TCS is expected to cross Rs 7000 crore mark in 2003-04. The post-issue valuation

of the company could be around $10 billion. The exact valuation would depend on

final pricing.

It is also expected that TCS is likely to be demerged and corporatised as an

independent entity contingent upon the IPO. The Bombay High Court has already

approved the scheme of arrangement between Tata Sons and TCS, which will result

in transfer of the division to Orchid Prints that has been renamed as TCS. The

IPO would provide an opportunity for Tata Sons and its shareholders to realise

the value of their holdings through the sale of their shares after TCS gets

listed.DSP Merrill Lynch, JM Morgan Stanley, JP Morgan, and Kotak Mahindra

Capital Company are likely to be the lead-managers for the IPO.

Rahul Gupta in Mumbai