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Ending months of speculation in the share market over the timing of its IPO (initial public offering), India’s largest IT (infor­mation technology) services company Tata Consultancy Services (TCS) "created a record of sorts as its IPO was oversubscribed by 6.69 times and received a total application amount worth Rs 34,000 crore as against the issue size of Rs 4,991 crore,” re­ported The Indian Express of August 6, 2004 in its early reports on the IPO. (The paper’s edition of August 25 stated it was oversubscribed 7.7 times.)

Opening on July 29, 2004, the IPO almost sailed through on the first day itself, according to The Indian Express of July 30, an indicator of the confidence of the investing public in the Tata brand and in TCS which crossed a billion US dollars in revenue in the financial year 2003. TCS’ extensive global foot­print includes a sales and marketing presence in 149 offices in 32 countries and delivery capabilities in 14 cities in India and 17 cities in nine other countries. As per the IPO prospectus, the USA provided the largest segment in 2004, despite the highly competitive and mature IT services market there.

"TCS finally became a listed company on August 25, 2004, debuting on the Bombay Stock Exchange (BSE) at a cool 23.5 per­cent premium to its offer price,” wrote The Indian Express of August 26. Closing the first day on the BSE at a price of Rs 987.50 (for a one rupee share), TCS’ market capitalization (cap) stands at a solid Rs 47,229 crore, making it the third largest Indian company in terms of market capitalization behind public sector behemoth ONGC (Oil and Natural Gas Commission — market cap Rs 1,00,028 crore) followed by Reliance Industries (Rs 63,933 crore). It also over­took Infosys Technologies (Rs 41,082 crore) to emerge as the number one Indian IT firm in terms of market cap, adds the paper. 

Thanks to TCS, the Tata conglomerate also overtook the Reliance group to become India’s top private business group, the Express added. "I was overwhelmed by the interest shown by individual investors for the TCS IPO,” group chairman Rata Tata said at the listing ceremony.

An interesting fallout of the TCS IPO was that Shapoor and Cyrus Pallonji Mistry, sons of low-profile Pallonji S. Mistry, chairman of the Shapoorji Pallonji group, sold their stake of 25 lakh plus TCS shares through the IPO, making a cool Rs 214 crore, as per the Express of August 26. The Mistrys still hold another 58.56 lakh shares directly in TCS, besides their substantial holding in Tata Sons (which is the holding company), according to the ENS (Express News Service) Economic Bureau.

Dr Cyrus Poonawalla, chairman of the Poonawalla group of companies, staked Rs 121 crore to become the largest single investor in the non-institutional category. "Usually I do not apply for IPOs as the allocations are normally very small... However in this case I made an exception only because the Tatas were into it,” Poonawalla told Sunanda Mehta in Poona, reported in The Indian Express of August 25. Poonawalla was said to have protested against the "miserable allotment” of just six percent of the total number of shares he had applied for even though he had bid at a higher price of Rs 900 (The IPO had offered a price band of Rs 775 — Rs 900 per share of Re 1; the issue price finally worked out to Rs 850). Poonawalla also became a "trend­setter of sorts (in Poona) when he dished out an advance of Rs 50,000 to each of the 400 employees at (the Poonawallas’) Serum Institute of India to help them apply for the shares,” added Mehta. "I did this because I thought it’s a good chance for them to make some money,” stated Poonawalla.