The Hindu Business Line : Sale of Govt stake in CMC opens on Feb 23

THE public sale of the Government's stake of 26.25 per cent in software company CMC Ltd, whose majority ownership is now with the Tata group, will open on February 23 and close on February 28.

The price band for the sale of 3.98 million equity shares, which will be made entirely through book building, will be announced a day before the offer opens.

Global road shows for the issue will start tomorrow itself, said Mr S. Ramanan, Managing Director and CEO of CMC. The Government and managers to the issue will make presentations to potential investors in Singapore, Hong Kong and London, said a senior official with HSBC Securities & Capital Markets (India) Pvt Ltd, one of the book-running lead managers to the issue. The other one is Enam Financial Consultants Pvt Ltd.

Up to 50 per cent of the offer is to be allocated on a discretionary basis to qualified institutional buyers; not less than 25 per cent on a proportionate basis to non-institutional bidders, and not less than 25 per cent on a proportionate basis to retail bidders, subject to valid bids being received at or above the offer price.

After the offer, the Tata group will continue to hold 51.3 per cent stake in the company while the share under the category `public and others' will rise to 48.7 per cent from 22.4 per cent.

At prevailing prices, the sale would fetch around Rs 211 crore for the Government.

The proportion of export contribution to the company's revenues - currently at 20 per cent - has been targeted to double in the coming years, said Mr Ramanan.

CMC would benefit from the synergies it enjoys with Tata group company Tata Consultancy services, said Mr S. Ramadorai, Chairman of CMC. They could pool delivery and support sources and CMC would also profit from the reach of TCS, he said.

The CMC scrip closed at Rs 530.85 today, marginally lower than its closing price of yesterday.

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