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Technology Stocks : Satyam Infoway Ltd-(Nasdaq:SIFY) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (1189)	3/15/2000 9:06:00 PM
From: Mohan Marette	Respond to of 1471

OT Tatas mull listing holding company, TCS tcs.com tata.com Rajarshi Roy in Mumbai The Tata Group is examining the possibility of listing holding company Tata Sons some time this year, as part of its strategy to restructure itself into a new economy conglomerate. The Tata Sons brass has been discussing the issue internally. It has also consulted advisors, including merchant bankers. The group is also considering the option of spinning off Tata Consultancy Services, at present a division of Tata Sons, into a separate company and taking the new entity public. The group is considering an initial public offering of about 10 to 20 per cent in either Tata Sons or TCS, group sources said. "Internally the group has set a time frame of at most a year for the IPO," they added. In response to a faxed questionnaire, a Tata group spokesperson told Business Standard, "We would not like to comment on this issue at the moment." Merchant banking sources said senior Tata executives have had initial talks with Goldman Sachs. The group is working out the modalities and operational issues related to listing either Tata Sons or TCS with its advisors. The feeling within the group brass is that it might be a better idea to take Tata Sons public as it would unlock the value of TCS and also of other software companies of the group like Tata Infotech, Tata Honeywell, Tata Technologies, Tata Intercative Systems and Tata Elxsi (India). TCS is by far the biggest infotech company in the country. This benefits of the IT boom could be cashed in without actually taking TCS public. An analysts said, "Because of the dominance of TCS, Tata Sons will get a valuation which is in line with the IT sector. And even after Tata Sons is listed, Tatas still have TCS as an ace up their sleeve and can take that public at a later date." Fueled largely by the performance of TCS, Tata Sons' earnings per share have jumped from Rs 7,277 in 1995-96 to Rs 7,349 in 1996-97 to Rs 11, 443 in 1997-98. Tata Sons, the holding company for the 80 odd companies comprising the Tata group, has five main operating divisions. It has paid-up capital of Rs 100 crore, reserves of Rs 1,417 crore and an investment portfolio of listed shares having a market value of around Rs 4,000 crore. Eighty three per cent of Tata Sons' equity is held by three trusts and several Tata group companies while the remaining 17 per cent is held by ACC chairman Shapoorji Pallonji Mistry. ============= TCS could have Rs 226,000 cr ($49 bil) market cap B G Shirshat in Mumbai Tata Consultancy Services could become India?s most valuable company if it were to be listed. TCS earned a net profit of Rs 507.69 crore ($110 mil) in 1998-99. This is 3.70 times that of Infosys Technologies and thrice the net profit posted by India's largest company by market capitalisation, Wipro. Assuming the paid-up value at Rs 10 per share, on the basis of equity capital of Rs 26.94 crore, the earnings per share of TCS works out at Rs 188.45. If TCS were to get the same valuation as Wipro, with a price-to-earnings multiple of 445, the value of one Rs 10 share of TCS would be Rs 83,862. This would take its market cap to about Rs 2,26,000 crore. In case TCS were to command a P/E multiple of 269 - the same as Infosys - its market price would be about Rs 51,000 per share. The market cap would then be Rs 1,36,568 crore ($30 bil). -BS (3/16/00)