The country’s largest software services firm, Tata Consultancy Services (TCS), is expected to complete a prospectus within six weeks but a possible stock offering won’t take place until the year-end, says Tata group chairman Ratan Tata, adding he has not yet taken a final decision to float the company.

An IPO can value TCS at $7billion, more than the $6-billion value of the Tatas’ 29 listed companies. The float of a 10-percent stake will rival the $690 million issue by largest conglomerate Reliance in 1993 as the nation’s biggest deal ever.

Mr Tata, who at 65 still puts in at least 50 hrs of annual flying in his MD-902 helicopter and two Falcon jets, says he will actively run the group for at least three more years and not name a successor until that time.

Mr Tata wants to create a more streamlined and cohesive group. The aim is to cut the group’s 80-odd companies to about 35 and pull half of the 29 listed companies from the stock market before he retires in
December 2007.

"We’re moving companies in the same business together and selling off some of the companies," Mr Tata says in an interview to Reuters. "As we’ve been here for (so many) years, there is a lot of resistance to this." The group employs about 2,20,000 people and racked up sales of more than $10 billion during FY02, about 2.5 per cent of the national economy.

TCS competes with Infosys for outsourcing business. From that point on, he can decide at any time to pull the trigger on the IPO. "We’ll be ready in that form. If we don’t go we’ll have to update the prospectus," says Mr Tata, who studied architecture at Cornell University in the 1960s.

The float would be three times as much as the recent $212 million Maruti offering. But regulatory approvals and marketing the IPO will take up to four months to complete, meaning the stock will not debut before the year-end, admits Mr Tata. "There’s a whole host of things, we might be thinking about three-four months after that".

A definitive decision to go ahead with the IPO depends on how much new stock will come to market, trends in the technology outsourcing business and cash for the group’s investments into new businesses such as telecoms, he says. "You have Infosys, some PSUs offloading and Maruti happening all at once," Mr Tata says, adding "you have to ask yourself: ‘How great is the appetite going to be if all that happens when TCS comes to the market."

An IPO could value TCS at Rs 325 billion ($7billion), based on a sales comparison with Infosys, he agrees. Infosys’s market value is Rs 234 billion or 6.5 times sales of Rs 36 billion in the fiscal year ended
March 31.