Mumbai, Aug. 24: The click of a mouse will put Tata Consultancy Services (TCS) on trading screens and turn the Tatas into the most highly valued private group.
The jewel in the Tata crown will join Infosys and Wipro in the trading ring with Ratan Tata, chairman of the Rs 57,000-crore group and S. Ramadorai, managing director of TCS, presiding over the listing ceremony to be held at the National Stock Exchange on Wednesday morning. Another group led by Ishaat Hussain, a Tata Sons top gun, will do the honours on Bombay Stock Exchange (BSE).
They will see the Tata group becoming the largest wealth creator among private sector companies — overtaking Reliance — by a few thousand crores within seconds of the listing of the TCS share on bourses.
There will be many firsts. One of them is that NSE will put the TCS stock into its futures and options list on day one itself. “It is difficult to ignore a heavyweight with market capitalisation of Rs 45,000-50,000 crore even if it is the first day,” said an operator. Almost 87 per cent of the share-value will be with the Tatas.
Many believe TCS would make it to key indices like BSE sensex, NSE’s nifty — and possibly even the Morgan Stanley Capital Index — sooner than most. However, that is likely to take at least three months, the minimum time Sebi lays down for inclusion in a market gauge.
Arun Kejriwal of Kejriwal Research and Investment Services sees the share trading between Rs 1,075 and Rs 1,125, a premium of 26 to 32 per cent, on the issue price of Rs 850.
Ratan Tata could click the mouse to flag off TCS on NSE, while Ishaat Hussain may strike the gong in the BSE’s Rotunda Hall — just the way they do it on Wall Street.
He has said in the past that he would set in motion plans to get TCS shares listed on overseas exchanges. However, he did not say how and when he would go about achieving the long-cherished objective.
Brokerages have started advising clients to switch from Wipro to TCS. However, high- networth investors who sell on the first day and repay expensive bank overdrafts will be tempted to wait, says Ajit Sanghvi of MSS Securities. “They will cling to TCS shares as the Finance Bill will tax short-term gains only at 10 per cent against 30-35 per cent at present.”
So, waiting for a week would give investors an opportunity to pocket more than otherwise possible. Unlike scrips which have been sold heavily on debut, TCS could see its investors hang on longer.
“Normally, high-networth investors and corporates are prone to selling shares immediately,” Sanghvi added. That is because they often borrow funds from banks to invest in new issues.
Shares set aside for institutions — 60 per cent of the issue — were oversold seven times. Rumours had swirled that Calpers was in the fray, 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.