Stock Bonanza For TCS Staff

Mumbai, Sept 28 | Updated: Sep 29 2004, 05:30am hrs
Employees of Tata Consultancy Services (TCS) and its subsidiaries are in for a windfall as the TCS board on Tuesday cleared an Employee Stock Purchase Scheme (ESPS) at a mere Re 1 per share with a one-year lock-in. The TCS stock closed on the Stock Exchange, Mumbai (BSE) at Rs 1,015.15.

The total value of the scheme at Tuesdays closing price works out to Rs 231.20 crore. TCS had earlier decided to seek shareholder approval through postal ballot to offer, issue and allot equity shares not exceeding 18,22,000 under the ESPS to select employees and directors of the company.

The company will also seek boards approval to offer, issue and allot 4,55,500 shares to select employees and directors of its subsidiaries. The total number of shares offered under ESPS therefore works out to 22,77,500 shares.

The effective date for qualifying for the ESPS is August 9, 2004. Subsidiaries Tata America International Corporation, TCS Asia Pacific Pte Ltd, TCS Iberoamerica SA would be eligible.

The scheme is also broken down into categories depending on years of service: 5-7 years, 7-10 years, 10-15 years, 15-20 years, 20-30 years and above 30 years.

The TCS offer document had mentioned that any issuance of equity shares pursuant to ESPS would result in a charge to the companys income statement equal to the product of such number of shares issued and the difference between the market price of shares as on the date of their issue and the price at which the employees will purchase the shares. At that point, for indicative purposes, the charge based on the upper limit of the price band, which was Rs 900, was estimated at Rs 215 crore.