TCS offer opens on July 29

Book-built issue to carry a Rs 900-1,000 price band; Road shows to kick off on July 21.

The Tata Consultancy Services' initial public offering (IPO) is set to hit the market on July 29, coinciding with the birth centenary of JRD Tata.

The issue, expected to raise over Rs 5,000 crore, will be the largest in the Indian private sector.

Investment banking sources said road shows for the issue would kick off on July 21. Teams of merchant bankers and TCS executives will criss-cross the globe, hawking the public issue of Asia's largest IT services provider.

TCS on Thursday submitted its response to the queries of the Securities and Exchange Board of India (Sebi) on its draft Red Herring prospectus filed with the capital market watchdog on June 10.

Sebi is expected to clear the prospectus tomorrow. Armed with the regulator's approval, TCS may file its prospectus with the Registrar of Companies (ROC) for final clearance either tomorrow or on Monday.

"Once the ROC clears it, TCS is expected to hit the market on July 29 even though it will have three months after the ROC clearance to float the issue," sources said.

The book-built issue is likely to carry a price band of Rs 900-Rs 1000. "The response from the qualified investors at informal discussions is encouraging. It may not be difficult to get the upper end of the price band," said a merchant banker.

TCS Vice-President for Corporate Communications Atul Takle declined to comment on the development, citing the "silent period" TCS was in. A Bombay House spokesperson said no final decision had as yet been taken on the date of floatation (of the IPO).

Merchant banking sources said the company was working simultaneously on two or three plans and that the floatation date had definitely fixed as July 29 in one of them and that it was expected to go ahead with this date.

Sebi, in a statement on July 5, made some observations on the issue, managed by JM Morgan Stanley, DSP Merill Lynch and JP Morgan India.

TCS will offer 5.54 crore equity shares of Re 1 each, including a fresh issue of 2.27 crore shares. The issue also consists of an offer for sale of 3.26 crore shares by Tata Sons and other TCS shareholders.

According to TCS's draft prospectus, around 60 per cent of the net offer amounting to 29,944,410 equity shares will be allocated on a discretionary basis to qualified institutional investors (QIBs) and a minimum 25 per cent of the issue, which is around 12,476,840 equity shares, will be allotted to retail investors on a proportionate basis.

At least 15 per cent of the offer, amounting to 7,486,090 equity shares, will be allotted to non-institutional bidders, including NRIs.

TCS entered the $1 billion club by posting revenues of Rs 5,085.2 crore (around $1.1 billion) for the nine months ended December 31, 2003.