Tcs Group Holding Ipo Prospectus

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.

How to Evaluate an Initial Public Offering (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.

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