Greenshoe amount will be used to stabilise prices

TCS PUBLIC OFFER

Tata Consultancy Services' (TCS) initial public offering comes with a greenshoe option of up to 8,317,880 equity shares.

The company has appointed J M Morgan Stanley as the stabilising agent for the transfer of the shares. The greenshoe amount will be utilised to stabilise the price of TCS shares up to 30 days after the company obtains trading permission from the stock exchanges.

The price, timing of purchase, and quantity of purchase of the equity shares from the market will be determined solely by the stabilisation agent.

The greenshoe lenders will be Tata Sons, Sheba Properties, Kalimati Investment Company, Af-taab Investment Company, Shapoorji Pallonji Mistry and Cyrus Pallonji Mistry.

These lenders will transfer the equity shares to the stabilising agent upon the exercise of the greenshoe option.

While Tata Sons will offer 3,690,080 shares if the greenshoe option is exercised, 1,394,750 shares will be offered by Sheba Properties and Kalimati Investment Company will offer 981,062 shares.

Af-taab Investment Company will offer 751,988 shares through the greenshoe option, while Shapoorji Pallonji Mistry and Cyrus Pallonji Mistry will offer 750,000 shares each.

The company will pay a fee of Rs 2 crore to the greenshoe lenders on a pro-rata basis, depending on the number of equity shares being lent by them.

As per the draft, the stabilising agent will first borrow the equity shares from greenshoe lenders, other than Tata Sons, and only if the shares borrowed from them are not sufficient, shares will be borrowed from Tata Sons.

The equity shares available for allotment under the greenshoe option will first be allotted to employees up to 10 per cent of the greenshoe amount.

The rest will be shares between qualified institutional buyers, non-institutional bidders, and retail individual bidders in the ratio of 60:15:25.