Jewel In Tata Crown Shines On Debut

Mumbai, Aug 25 | Updated: Aug 26 2004, 05:30am hrs
The stock of Tata Group tech major Tata Consultancy Services Ltd (TCS) made a sparkling debut on Wednesday, catapulting the Tata Group to the top slot in terms of market capitalisation. The TCS effect saw the Tatas displacing Reliance as the number one business group in market capitalisation stakes.

As group chairman Ratan Tata flanked by TCS managing director S Ramadorai and investment bankers Nimesh Kampani and Hemendra Kothari kicked off trading at the National Stock Exchange (NSE), the stock opened at Rs 1,198.70 against its issue price of Rs 850. This is Rs 348.70 or 41.02 per cent higher than the issue price. For NSE, the occasion was doubly special: the listing came on NSEs tenth birthday.

However, on The Stock Exchange, Mumbai (BSE), the stock made its debut at a much lower Rs 1,050, up 23.53 per cent or Rs 200 in comparison to the issue price.

According to dealers, the discrepancy in the opening prices on NSE and BSE was on account of a couple of stray deals at the time of the opening bell. But after a few seconds, the stock prices at both the exchanges were more or less level.

The market capitalisation (M-Cap) of TCS at the BSE on the first day of listing stood at Rs 47,230 crore. As a result, the company has catapulted to the third position in terms of overall M-Cap after Oil and Natural Gas Corporation Ltd (ONGC), which is at Rs 100,000 crore, and Reliance Industries, which is at Rs 63,000 crore.

At the BSE, the TCS stock closed at Rs 987.50, up Rs 137.50 or 16.18 per cent from the issue price of Rs 850. The stock registered a high of Rs 1,080 and a low of Rs 979. At the NSE, it closed at Rs 987.95, up Rs 137.95 to its issue price with a high of Rs 1,198.70.

The stock recorded a low of Rs 979. The combined volume on the BSE and NSE stood at 2.37 crore shares. On the BSE, TCS recorded the highest volume, while on NSE it was the second best after that of Steel Authority of India Ltd (SAIL).

But it wasnt a hiccup-free party. About 2 per cent of retail investors in TCS were disappointed as their shares were not credited to their demat accounts due to unavailability of correct demat account numbers.

Karvy Computershares, the registrar to the TCS issue, said they were addressing the problem and were in constant touch with investors to get the correct demat data. This allotment problem came on a day when the Securities and Exchange Board of India unveiled the first draft of its SMILE panel report on capital market infrastructure.

Elsewhere, Sebi chairman GN Bajpai told reporters on the sidelines of a function on Cyber Safety that Sebi would look into the TCS allotment problem and may initiate action to resolve investor complaints, if any.

At the listing ceremony at NSE, TCSs managing director S Ramadorai said, The listing will enhance TCSs profile globally and will act as a currency for the companys growth plans apart from meeting the expectations of employees. The great thing about the IT industry is not so much about where we stand, but about where we are going.

Mr Tata said the listing would enhance the profile of TCS globally. We are delighted to take TCS in the public domain with this listing. We hope this issue will give happier times to shareholders. Mr Ramadorai added that there was a huge expectation from investors and so was TCS commitment.

Ravi Narain, managing director, NSE said, The listing of TCS will enhance the market capitalisation and will be one more exciting investment opportunity for investors. Moreover, today is a very special occasion for us (NSE), since we have completed 10 years and are proud of TCS being involved with us since our inception.

The 100 per cent book-built issue of TCS was subscribed 7.7 times and the company has set a fixed price of Rs 850 per share. At the issue price, the company raised Rs 5,420 crore which includes a green shoe option of Rs 706 crore. The IPO for 6.37 crore equity shares represent 13.3 per cent of the total equity capital of the company.