CMC files offer for residual stake sale
The Financial Express, February 1, 2004

The offer document for the divestment of the goverment’s 26 per cent stake in CMC Ltd has been filed with the market regulator late Friday. The Tata group, which holds 67 per cent of the firm, had declined to buy out the centre’s stake.

The government will offer 39.76 lakh equity shares to the public or private investors, according to the prospectus.

The Tatas had previously purchased the government’s 51 per cent stake in CMC, through the closely held Tata Sons Ltd. The stake was later increased to 67 per cent through an open offer.

CMC Ltd, once a public sector undertaking, is still dependent on the government for most of its business. About two-thirds of its revenues were from the government and government entities. A “purchase preference” extended to CMC after the divestment also ended in October 2003 and currently has to compete like any other software firm for government business.

HSBC Securities and Capital Markets (India) Pvt Ltd and Enam Financial Consultants Pvt Ltd, are the lead managers for the offer.

Meanwhile the stock closed at 566.15 on Friday at the National Stock Exchange, a fall of 3.67 per cent over the previous close.