Indian Software Developer/Outsourcer Tata Consultancy To Go Public
The initial public offer on Thursday of 55.45 million shares is expected to raise between $935 million and $1.25 billion, before closing on Aug. 5.
"We have been preparing for this for nearly two years," said executive vice president Phiroz Vandrevala, who was in Bangalore earlier this week to generate interest in the share issue.
Tata Consultancy exported software and related services worth $1.2 billion in the fiscal year that ended March 31. Total revenues, including domestic sales and other income, were $1.55 billion.
Started in 1968, Tata Consultancy was the first to sell western companies on getting software development work done in India, taking advantage of the country's large pool of skilled workers and low wages.
As many as 39 of the top 100 Fortune companies outsource some of their software work to Tata Consultancy Services. Its 548 clients include AT&T, American Express, Boeing, British Telecom, Compaq, IBM, Dell, Microsoft, General Motors and the state governments of Montana and Pennsylvania.
The company has kept a low profile, however, compared to its close rivals in India, such as Infosys Technologies and Wipro, which make about $1 billion each in software exports and are already listed on stock exchanges in India and the United States.
The Tata group resisted the temptation of a booming stock market in the 1990s and continued to run Tata Consultancy as family business. But increasing competition and the need for a better corporate identity prompted a reevaluation.
"A lot of debate took place within the company on this issue," said Vandrevala. "We had to teach ourselves the discipline of being a public company and change our culture, before we came out with this."
The shares will be priced at 775-900 rupees (US$16.80-$19.50), depending on the bidding. The company also has the option of offering an extra 8.3 million shares if demand is high.
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