TCS Public Offer!!!

TCS Public Offer is to open in the month of August 2005. They say they will place the shares to the public with in the range of Rs800/- to Rs1000/- per share. Is it worth subscribing for this issue through the public issue or wait for it to come to the stock exchange. Can any one tell me exactly what is the PE of this issue and how much it can be correctly offered to the public.
The TCS IPO at the Rs 750 - 850 ranges should be a good buy. It will not be overpriced, as it will have a P/E of 22- to 25 at this price. Other similar companies have a P/E of 28 - 30 so there will be a chance of escalation of 15 % after opening.

THE initial public offer of Tata Consultancy Services opened on Thursday with bids for over 91 per cent of the shares on offer. Bids were received for 5.05 crore shares out of the 5.54 crore on offer.

However, maximum number of bids has been received around Rs 800, towards the lower end of the band. At Rs 900, the higher end of the price band, only 2.6 lakh shares have been bid, according to data from the stock exchanges.

Nearly 10,000 applications have been received from across the country, informed a book running lead manager.

Merchant banking sources say that while the Qualified Institutional Buyer category has been subscribed 1.7 times, the response from retail investors have been tepid, so far. Merchant bankers claim that retail activity in IPOs usually gain steam towards the end of the offer period and it is too early to make a clear judgment of the issue.
TCS IPO seen priced in 850-875 rupee band

Tata Consultancy Services Ltd., India's largest software services exporter, is expected to price its initial public offer (IPO) between 850-875 rupees, bankers working on the issue told Reuters on Friday.

They said the highest bids have come in that band, while the issue was offered between 775 to 900 rupees. A banker close to the deal said a panel of directors of Tata Sons would meet on Saturday and decide the issue price.

Tata Sons is the investment holding company of the Tatas. After the IPO, it will hold 81 percent in TCS.

The sales represent a 13.3 percent stake in the company and at 875 rupees a share, TCS will be valued at $9.0 billion, making it India's third-biggest company by market capitalisation.

At Friday's closing price, rival Infosys Technologies Ltd., India's second-biggest software services exporter, was valued at $8.9 billion.

The basic issue of 55.45 million shares was bid 10.3 times, with a total of 1.3 million retail applications. The institutional tranche was subscribed 7 times.

The company is offering a total of 63.75 million shares, including a greenshoe option of 8.3 million shares and bankers said it could raise up to $1.2 billion, making it India's largest ever IPO and Asia's second-biggest Asian tech IPO this year.
TCS listing likely on Aug 25 or 27

Tata Consultancy Services Ltd., India's largest software services exporter, is expected to list its shares at the stock exchanges on August 25 or 27, a banker working on the issue said on Thursday.

"Depending on the availability of Ratan Tata, the listing will happen on either of the two days," said the banker, who declined to be identifed.

Last week TCS concluded India's biggest initial public offer, raising $1.17 billion by selling a 13.3 percent stake.

The company is a unit of India's second-largest private conglomerate -- the Tata group -- and Chairman Ratan Tata will ring the opening bell at the listing ceremony at the Bombay Stock Exchange.

TCS priced the IPO at 850 rupees a shares, near the top end of a previously set 775-900 rupee price band.

The issue was subscribed 7.7 times and grey market trade indicates the stock will open some 200 rupees above the offer price.
TCS to list shares on Aug 25

Tata Consultancy Services Ltd. (TCS), India's top software services exporter, will list its shares on the Bombay and National stock exchanges on August 25, a spokesman for the company said on Thursday.
TCS shares to gain 25% on first day of listing.

TCS shares to gain 25% on first day of listing.

Shares in Tata Consultancy Services Ltd. are expected to rise by a quarter when they start trading on Wednesday after India's largest IPO, as investors bet on strong growth for the leader of the nation's software services industry.

Expectations of an upbeat debut follow heavy demand for the initial public offering, which raised 54.2 billion rupees ($1.17 billion) and was subscribed 7.7 times.

In Asia's second-largest technology IPO this year, TCS sold 13.33 percent of its equity this month, pricing shares in the top half of a previously set band at 850 rupees each.

Analysts expect a scramble for the shares on day one. The stock is already available at a 200-rupee, 19 percent premium in the grey market.

"The unsatisfied demand itself will push up the price on listing," said Apurva Shah, a technology analyst with local brokerage Prabhudas Lilladher.

The TCS listing will add some $10 billion to India's market capitalisation, which stands at $239 billion. At the offer price, TCS would be India's fifth-biggest company by market value, just behind its closest rival in the $12.5 billion software services industry, Infosys Technologies Ltd.

"The euphoria surrounding the issue will lead to some more demand. But what is important is to see at what level the stock eventually settles," Shah said.

The company, a unit of India's second-largest private conglomerate, Tata, had revenue of $1.3 billion in the fiscal year ended March.

General Electric Co. accounts for some 17 percent of its sales, and TCS is the largest offshore IT services supplier to the company.


Analysts expect TCS to report earnings per share (EPS) of about 42 rupees for the year to March 2005, up 24 percent from the past year, giving it a price to forward earnings ratio of 20 times at the IPO price.

That is a discount to Infosys, which trades at about 25 times forward earnings. The predicted first-day rise for TCS would take it to a similar P/E ratio.

TCS's debut on Wednesday comes close on the heels of a similar-sized technology issue -- the $1.67 billion IPO from Google Inc., the world's largest Internet search engine.

Google shares jumped 18 percent on their long-awaited market debut, after a scaled down IPO.

Despite a flood of IPOs in India this year, returns have been modest and some of the most high-profile new shares are trading at a discount to their offer prices.

Investors expect TCS to end that trend.

"Clearly, the company has left something on the table, so we expect a strong opening," said Sashi Krishnan, chief investment officer of Cholamandalam Asset Management.

His fund has recently increased its weighting of technology stocks to insulate the portfolio from oil and inflation shocks.

"TCS is not a trading call for us, but a long-term investment," Krishnan said.

Analysts said the stock could settle between 1,000 and 1,110 rupees in the short- to medium-term.

TCS's debut will be helped by an improved outlook for Indian technology stocks, as an easing of pricing pressure and a stable currency is helping restore confidence in the sector.

The IT index of the Bombay exchange has shed 4.4 percent in 2004, compared with a 14.9 percent slide for the main index of the exchange.

The TCS offer marks Asia's second-largest tech IPO this year, after Chinese chipmaker Semiconductor Manufacturing International Corp. raised $1.8 billion in March.

Set up in 1968, Bombay-based TCS is led by Chief Executive S. Ramadorai, a 32-year company veteran. The diversified Tata conglomerate's interest ranges from salt to cars and telecoms.

With some 30,000 staff, TCS has 149 offices in 32 countries and boasts 491 clients, including six of the 10 largest and 37 of the 100 largest U.S. firms in the Fortune 500.

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