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Revised IPO norms: TCS to seek Sebi exemption on dilution of shareholding
Mumbai: The Tata Consultancy Services (TCS) is planning to seek an exemption from the Securities and Exchange Board of India (SEBI) from offering a 25 per cent shareholding to the public, as mandated by the revised initial public offer (IPO) norms.

Last year TCS had offloaded 15.16 per cent of its equity to the public through an IPO, and now to meet the revised Sebi norms, the company will have to divest an additional 9.84 per cent stake to the public within the next two years.

In 2001, the Sebi had permitted software, telecommunication and media companies to offer only 10 per cent of their total equity stake to the public. The Tata group company was listed on August 25 last year under Clause 19(b) of Sebi regulations.

The regulator's order last week, Friday, revised the book-building norms by removing the discretionary allotment for qualified institutional buyers (QIBs), and made it mandatory for firms to offload a minimum of 25 per cent to public shareholders.

Mutual funds and UTI held 1.31 per cent, banks and financial institutions held 1.18 per cent, foreign institutional investors held 6.11 per cent and others held 6.56 per cent of the total public stake of 15.16 per cent. Others include private corporate bodies, the Indian public, non-resident Indians and overseas corporate bodies.

The initial lock-in period on diluting the promoters' holding in TCS is over with the company's public float being one year old now. The promoters can dilute as much as 64.4 per cent now as there is a three-year lock-in period on 20 per cent promoters' stake.
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