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Last Updated: Thursday, 29 July, 2004, 11:44 GMT 12:44 UK
India launches record share float
Tata flotation poster
The TCS float has been high-profile
India has launched its biggest-ever share flotation, with the $1.2bn (660m) debut of software firm Tata Consultancy Services (TCS).

TCS is being spun out from the Tata group, one of India's biggest private business empires with interests which range from tea to trucks.

The initial public offering (IPO) is being seen as a boost for India's sometimes lacklustre stock market.

Even so, the IPO began slowly - but analysts expect demand to pick up.

Letting go

Tata's management decided to float TCS only after much deliberation; usually, the firm prefers to hold its assets closely.

TCS's big rivals - companies such as Wipro and Infosys - are already stock-market-listed, a factor that analysts see as crucial for their performance.

Hi-tech firms commonly reward staff through shares or stock options, something possible only if TCS is individually quoted.

The IPO is not seen as the beginning of a raft of spin-offs from the Tata group.

But Tata Motors, which already has some shares in private hands, is to list American Depositary Receipts on the New York Stock Exchange.

Ups and downs

Interest in the TCS sale has been intense: serious IPOs are few and far between in India.

Bombay brokers
Slow privatisation has kept new issues to a trickle

One in five of the 55 million shares were bid for within the first half-hour of the IPO. By mid-day, all 33 million shares reserved for institutional investors had been snapped up.

Foreign bidders were especially prominent, brokers said.

Retail demand has been slower, but small investors have until 5 August to register their interest.

India's stock market has generally been held back by the slow pace of privatisation in the country, and by perceptions that trading can be dangerously volatile.

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