TCS looks for buyouts after initial offer

Software major Tata Consultancy Services (TCS) is looking at a number of acquisitions after its initial public offering (IPO).

The company has drawn up plans to expand its footprint in the Latin America, China and Europe.

"At present less than two per cent of our revenue comes from Latin America. We would like to increase the region's share," said Phiroz Vandrevala, TCS executive vice-president, at a press conference to announce the company's IPO, scheduled to hit the market on July 29.

The company will focus more on growing areas like business process outsourcing (BPO), infrastructures and engineering services in addition to core services like consulting. TCS has already strengthened its BPO capabilities acquiring companies like WTI Technologies, Airline Finance Services and Phoenix Global.

"All our acquisitions so far have been cash acquisitions and there is a limit to such acquisitions. The IPO will give us the flexibility and currency to go ahead with merger and acquisitions," Vandrevala said.

"We, however, will think about only those significant acquisitions, that will add value to our company," Vandrevala added.

Without divulging details, Vandrevala said, " We have an mergers and acquisition cell which at any given point of time receives three to four proposals. It has not zeroed in on any target."

While expanding its global operations, the company will maintain its focus on the Indian market, TCS executives said.

In India, the company is planning to ramp up its development centres in Delhi, Bangalore, Pune, Mumbai, Chennai, Hyderabad and Kolkata.

Employees of Tata Sons and TCS will get special benefits from the IPO.

Employees of the company with certain number of years spent at a particular level will be granted equity shares at par value.

There is another cash component of Rs 90 crore, to be paid to those employees who do not get share grant. There is also a 10 per cent reservation in the book-building process for the employees of TCS and Tata sons.