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Tatas soar with TCS takeoff

Mumbai, Aug. 25: The first deal for a chip of Asia’s largest infotech company was wrapped up at Rs 1049 on the National Stock Exchange (NSE). The seller took home a gain of Rs 199 on every share of TCS, whose roaring debut on bourses made the Tatas the largest private group in terms of stock value, or market capitalisation.

The Tata group, with a turnover of Rs 57,000 crore, saw shareholder wealth skyrocket instantaneously to Rs 96,724 crore, a near two-fold increase over the Rs 49,494 crore it totted up with its gaggle of 31 listed companies.

Ratan Tata could not help reflecting on how today’s market darling has shaped up since 1968, when J. R. D. Tata and F. C. Kohli set up TCS. Those were the days when “information technology was not a much-used name”.

This morning, as TCS helped the Tatas outpace Reliance in market sweepstakes, Tata sighed that the journey to take the software powerhouse public was a long one.

Only ONGC with a market cap of Rs 1,00,029 crore is ahead of the Tata group; Reliance’s tally is Rs 82,201 crore.

In his brief speech before trading in TCS kicked off on NSE, Tata said he was delighted to offer shares to the public, but had “underestimated” the response from investors.

R. K. Krishna Kumar, member on the Tata Sons board, S. Ramadorai chief of TCS and . Chandrashekhar, vice-president in charge of TCS’ sales in the US, were with him. At the BSE, Noshir Soonawala, vice-chairman of Tata Sons, struck the gong — a long-held Dalal Street tradition for firms listing their shares.

The TCS stock cooled off as profit-hunters swooped in the post-noon session, but it still closed at Rs 987.50, up 16.17 per cent from its issue price of Rs 850. Ramadorai would not predict the share trajectory, but was forthcoming about the firm’s future. “Expectations from TCS are high, and so is our commitment to meet them.”

Investment bankers were more excited. JM Morgan Stanley’s Nimesh Kampani sees TCS’ market cap rising to $10 billion. Hemendra Kothari of DSP Merrill Lynch, whose birthday coincided with TCS’ market tryst, jested that bankers planned their dates very well. On a serious note, he said the overall stock sentiment would firm up.

NSE managing director Ravi Narain said the phenomenal success of the country’s largest bourse since it started business 10 years ago was partly the result of the cutting-edge software it had purchased from TCS.

“It’s a great long-term story,” said Dhiraj Sachdev of ASK Raymond James. Prominent BSE broker Ramesh Damani was baffled at the way the TCS stock came off its peak. One possible reason could be the rush to make quick profits.

TCS vice-president Phiroze Vandrewala confessed that many hearts missed a beat as the moment of reckoning arrived, but added that a roar went up when the first stock quote was flashed on trading screens of exchanges.

TCS completed India’s largest initial public offer, raising over Rs 5,000 crore by selling a 13.3 per cent stake. The price band for the book-built issue was Rs 775-900 per share. However, issue price was fixed at Rs 850.

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