91% of TCS offer sold

Maximum bids came in at Rs 800.

The TCS IPO was subscribed more than 91.08 per cent, according to figures posted on the Bombay Stock Exchange website at 9.30 pm. Bids for 50.5 million shares were received for an offer size of 55.40 million shares.

The maximum number of bids for 31.37 million shares came in at Rs 800, while bids for 6.32 million shares came in at Rs 775, the lower end of the price band, and bids for 2.61 million shares were logged in at Rs 900, the upper end of the band.

The institutional part of the offer received a very good response, but merchant bankers said retail and non-institutional investors usually bid towards the end of the offer period because they have to make a full payment for their bid.

Merchant banking sources said qualified institutional buyers had fully bid for the 60 per cent component of the issue reserved for them within three hours of the issue opening. There was substantial interest from domestic mutual funds. Brokers said the mood in the market was lifted by strong demand for the TCS issue.

RN Bhardwaj, managing director of LIC, said, "TCS will be a good company to invest in as it has important clients," including in domestic and international banking. He added that the strong Tata brand value was the key to attracting investors. LIC sources said they had a relatively small exposure to the information technology sector and would be looking to increase it.

LIC currently has investments in Infosys, Wipro, Satyam and HCL. "We have a larger investment portfolio in pharmaceuticals and automobile," they said.

Vijay Saraf, chief operating officer, Centrum Finance, said, "The TCS IPO has received a good response as it is one of our premier IT companies." He added that a good response for this IPO would whet the investor's appetite, which bode well for the primary market.

Meanwhile, in a recent report, Crisil estimated TCS' price to earnings (P/E) multiple at 20 to 23 for the current financial year. Crisil said TCS' P/E in 2003-04 ranged between 22.1 and 25.60 against Infosys' 31.50 and Wipro's 39.40.

However, the current year's estimates bring TCS at par with the other industry leaders in the segment. Crisil said the P/E estimates were based on the price band of Rs 775-900 per share in the ongoing IPO.