India's largest software company, Tata Consultancy Services (TCS), whose IPO closed on August 5, 2004, was a huge success. While the retail portion was oversubscribed nearly three times, the institutional investors' category was oversubscribed seven times. Mutual funds too participated heavily. Of the total issue size of Rs 554.53 lakh shares, they got 55.54 lakh shares, accounting for 10.02 per cent of the total issue size.
Since TCS is a technology company, all seven technology sector funds participated in the issue. Franklin Infotech and Kotak Tech had the maximum exposure in them as on August 31, 2004, - 9.95 per cent and 9.4 per cent of their net assets, respectively. On the other hand, DSPML Technology.com and Prudential ICICI Technology funds' allocation to TCS shares were below 5 per cent of their net assets. The other three tech funds - Alliance New Millenium, Magnum IT and UTI Software had 5 to 7 per cent exposure to TCS.
In all, 125 mutual funds of 21 different AMCs participated in the company's IPO. Of these, 53 were diversified equity funds, 28 hybrid funds, 26 MIPs, 11 tax-planning funds and seven technology funds. Interestingly, the two good performing funds in recent times, Reliance Vision and Reliance Growth, didn't participated in the TCS issue. The top three AMCs in terms of assets under management namely Franklin Templeton, UTI and HDFC together accounted for 56 per cent of the total shares allocated to mutual funds. And Franklin India Bluechip - the biggest equity fund in India with total assets of Rs 1,925 crore - bagged the maximum number of TCS shares accounting for 8.6 per cent of the total mutual fund share-breakup.
In terms of per cent of net assets allocation to TCS shares, Kotak Global India (6.37), LICMF Growth (4.69 per cent) and Sundaram Growth (4.19 per cent) topped the list among diversified equity funds. In the equity-oriented hybrid fund category, Magnum Balanced and LICMF Balance had the maximum exposure - 4.6 per cent and 3.8 per cent, respectively. And among MIPs, Deutsche MIP Plan A and Plan B had the largest exposure of 3.7 and 3.45 per cent.
On August 25, TCS listed on the stock exchanges at a premium. At BSE, it got listed at a 26 per cent premium and at NSE, the premium was a high 40 per cent to the issue price of Rs 850 per share. However, the stock was trading at Rs 998 on September 6, '04 - still at a premium of 17 per cent. TCS has now become the third largest listed company in India in terms of market capitalisation (Rs 47,000 crore), just below ONGC and Reliance Industries. TCS has also emerged as the third largest IT service company globally in terms of market capitalisation at $10.2 billion. Accenture and Automatic Data Processing occupy the first and second position with m-cap of $24.2 billion and $23.8 billion, respectively.
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