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TCS romps home with a record

Mumbai, Aug. 5: The largest-ever public issue in India drew a response 7.5 times the shares put up for sale.

Officials had yet to reel out the final tally as Tata Consultancy Services (TCS) romped home with a demand for 30 crore shares against the 5.5 crore it will part with.

The over-subscription was 7.5 times late tonight, though data from centres across the country was still being collated. Final figures are expected in the wee hours of Friday with bourses deciding to keep their bid-processing systems open till close to midnight today.

The Bombay Stock Exchange (BSE) worked till 11.30 p.m. “The final picture will probably emerge by 2 am on Friday,” an investment banker said.

Investment bankers put retail applications at over a million for 2.73 crore shares — a record of sorts for a book-built IPO. The response from small investors, who had to bid for at least seven TCS shares, was not unusual, given the way seven lakh of them queued up for a chip of ONGC when the company sold around 10 per cent of its equity in March. The Union Bank offer also saw a million aspirants, although analysts say many were customers and employees.

The common refrain among senior officials at Tata Sons — the group holding company that owns much of TCS now — has been about having a large participation of small investors in the offer.

“The equity cult seems to be finally spreading across the class of investors who have been known to prefer fixed-income securities,” a broker said.

The issue price — which could lie in the region of Rs 850 — will be fixed on Saturday. Most bids were tabled at Rs 850, though retail investors are believed to have pitched for Rs 900.

The price-band for bidding had been set in the range of Rs 775 to Rs 900 per share.

Shares set aside for institutions — 60 per cent of the issue — have been oversold 7.5 times. Rumours about Calpers having been in the fray swirled, as did the talk that CLSA, Templeton and HSBC GMO Emerging Markets had queued up for the TCS equity pie.

High-networth investors, who had to bid for more than Rs 50,000 worth of shares, will get 15 per cent of the offer.

Shares to be sold under the offer amount to 11.59 per cent of TCS’ paid-up capital. This could rise to 13.33 per cent when a greenshoe option of 83 lakh shares is exercised.

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