The Tata Consultancy Services' initial public offering is expected to be in the region of Rs 5,000 crore-Rs 6,000 crore (Rs 50 billion-Rs 60 billion) and will hit the markets after the Union Budget, even as the Tatas said they planned to invest Rs 20,000 crore (Rs 200 billion) in telecom business over the next three-four years and intend to enter the biotechnology segment.
J J Irani, director of Tata Sons, the holding company of Tata group, told reporters in Bangalore that Tata Sons would invest the proceeds of the sale of their shares in telecom business and new areas they might be moving into like bio-technology.
Tata Sons, which currently holds a 90 per cent stake in TCS, India's largest information technology company, will offload 14.4 million shares (a 3.17 per cent stake).
The TCS IPO-size is expected to be somewhere between Rs 5,000 crore and Rs 6,000 crore, Irani said.
The combined profit after tax of the Tatas -- which has 80 companies -- was more than Rs 5,000 crore (Rs 50 billion) in 2003-04. "We don't want to tom-tom about it."
Sounding extremely bullish on Tatas' telecom business, Irani said Tatas planned to invest Rs 20,000 crore in the telecom business in the next three-four years.
"The investment of Tatas in telecom will now exceed its investment in Tata Steel, Tata Motors or any other Tata companies," Irani said.
The Tatas are looking to acquire one or two small telecom companies, he said. "Telecom is going to be the main investment avenue for the Tatas."
Tatas want to be one of the big players in telecom in India and that would be achieved through consolidation.
Last year, the demand was so much that Tata Teleservices ran out of capacity, Irani said, adding: "This year, we will invest hundreds of crores of rupees on capacity building."
"Telecom is one business that would keep on growing -- the slope of growth might go up or come down -- unlike steel or motor business, which depends on demand-supply and goes through a cycle," he said.
He said biotechnology was on "our radar screen and on which we are keeping tabs. If the opportunity comes, we will invest."
Irani suggested that Tatas would get out of any business where they were not in the top three positions.
"We have 80 companies. There is always dynamism of acquiring and getting out of...we are not going to be amongst also-rans," he added.
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