Tata Consultancy Services, Asia's largest software company on Saturday announced a floor price of Rs 850 for its initial publics offer. The offering was launched with a price band of Rs 775 to Rs 900. At the issue price, the offering size is Rs 5420 crore (Rs 54.2 billion), including a greenshoe option of Rs 706 crore (Rs 7.06 billion).
Ratan Tata, chairman of Tata Consultancy Services said, "With this issue we have taken Tata Consultancy Services into the public domain. The response received was overwhelming from all segments of the investor community."
With total demand of around Rs 40,000 crore (Rs 400 billion) at the issue price, the IPO was subscribed around 7.7 times. The 100 per cent book built IPO attracted a record of over 1.3 million bids.
As per preliminary estimates, including the green shoe shares, the issue was subscribed approximately 7.7 times on an overall basis, and 2.2 times at the highest end of the band (Rs 900 per share).
Explaining the rationale behind pricing the issue at Rs 850, despite being oversubscribed at Rs 900 per share, Nimesh Kampani, chairman & managing director of JM Morgan Stanley said, "We have decided to fix the floor price at Rs 850 because we want to leave something on the table for the investors at the time of listing. The success of the issue is not pricing it at the maximum price but on market performance post listing."
JM Morgan Stanley, DSP Merrill Lynch and JP Morgan were the lead managers to the TCS IPO.
"The allocation to the qualified institutional investors will begin from next week and we are planning to list the shares by the last week of August, said Dominick Price, managing director and senior country officer, India and Sri Lanka, JP Morgan. Post listing, the TCS board will be expanded from the current 3 members in two months, added Tata.
