TCS May Merge CMC With Itself

Mumbai | Updated: Jul 30 2004, 04:13am hrs
Even as the initial public offering (IPO) of Tata Consultancy Services (TCS) gets underway, all indications within the company point to the possibility of the company merging CMC with itself. Sources close to TCS have indicated that the TCS-CMC merger could take place in the next 6 to 12 months. Tata Sons acquired a 51 per cent stake in CMC from the government for about Rs 150 crore over two years ago.

TCS and CMC have been making joint bids to several clients. A merger would therefore only make it seamless, the source explained. An instance of this kind of synergy is the integrated port management system from Adani Ports Limited. This project is for the computerisation of its bulk cargo needs for the port in Mundra in the Kutch district; this was jointly bagged by both the companies.

Apart from this, CMC focuses on infrastructure management which is also TCS focus area. It, therefore, makes sense for CMC to be positioned within the company rather than operate from the outside, the source added.

TCSs acquisition of CMC has helped in strengthening its position in the domestic market. CMC has a wide range of skills that comprises managing large turnkey projects, facilities management and maintenance, nationwide sales and support network, large domestic client base and a strong R&D focus.

When contacted, TCS executive vice-president Phiroz Vandrevala stated that a decision on these lines has not yet been taken.