The Tatas-controlled CMC Ltd will file its draft initial public offering prospectus with the Securities & Exchange Board of India on January 29 to offload the government's 26.25 per cent stake, a day after its board is to meet to clear the plan.

The company has already approached the Foreign Investment Promotion Board to allow participation of foreign institutional investors and other overseas investors in the public offer. Enam Consultants and HSBC Securities and Capital Markets (India) are the advisors for the exercise.

The CMC stock has now jumped to Rs 612.95 per share on the Bombay Stock Exchange, rising from Rs 491.30 on April 1. It is being seen as a move by the government to take advantage of the booming stock markets.

The Tatas, through group holding company Tata Sons, had initially bought 51 per cent in CMC from the government. It later hiked its stake to around 67 per cent after an open offer.

The Tatas has decided not to exercise the first right of refusal for buying the government's residual shares.

The Tatas have informed the government and CMC about its intention of not buying the government's balance stake. The Centre will offer the shares to the Indian public through an IPO. The shares will be tendered through the book-building route.

Tata Sons' holding in CMC will eventually be transferred to Tata Consultancy Services, the Rs 45,000-crore (Rs billion) group's infotech flagship, once the division is hived off into a separate company ahead of its much-expected IPO.

The operations of TCS and CMC has largely been integrated with TCS passing on its best practices to the erstwhile state-owned company.

CMC's net profit jumped 10.16 per cent last year to Rs 37 crore (Rs 370 million), while sales rose 8.7 per cent to Rs 614.7 crore (Rs 6.147 billion), in the first full year under Tata control.

In the first half of 2003-04, net profit increased 26.41 per cent to Rs 16.56 crore (Rs 165.6 million) on a turnover of Rs 343.16 crore (Rs 3.431 billion).