The onsite employees of Tata Consultancy Services, who constitute about 40 per cent of the total work force of the company, are "hugely disappointed" over not being able to participate in the initial public offering of the company.
Over 55 lakh (5.5 million) shares, totaling 10 per cent of the IPO, have been kept aside as 'employee reservation portion' in the public issue, likely to open for bidding on July 29.
However, over 10,000 employees deputed overseas (on work visa) are not eligible to participate in the bidding process due to laws imposed by the United States and other countries, the TCS informed its onsite employees last week.
"The onsite workers are hugely disappointed," said a TCS employee in Chennai on condition of anonymity.
TCS communicated to its employees last week that only those who are physically located in India are eligible to participate in the employee reservation portion.
When contacted, the TCS spokesman said: "The rules in the US and other countries clearly stipulate that onsite workers cannot participate in the IPO. However, they can nominate others to participate in it in the general portion."
However, employees said though TCS knew about this restriction, the onsite workers were not communicated this in advance. "What is most disappointing is that if TCS was aware of this restriction earlier on, no communication was made to employees so that they could adequately plan for it," they said.
The spokesman said the TCS' red herring prospectus specifies its intent to provide an employee share purchase scheme, whereby the company may issue shares up to five per cent of the paid-up capital after completion of the IPO to select employees.
A one-time cash payment to select employees, totaling Rs 90 crore (Rs 900 million), is also stated in the IPO, he said.
However, the employees said: "There is no clarity on the criteria for selecting workers for these rewards or whether all onsite employees would be included in it."
"This does not motivate the onsite employees, who yield over 64 per cent of TCS' revenue, to perform well," they said, adding it is sad that TCS did not make alternate arrangements to take care of such employees.
The TCS spokesman, however, clarified: "The decision to submit the red herring prospectus was made in just a week's time."
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