After becoming the third largest IT service brand in the world, TCS surpasses IBM in market cap
- Indian tech major,
Tata consultancy services, surpassed US tech giant IBM after Monday’s trade.
- Once about to be sold to IBM,
TCSwitnessed 23% increase in brand value in 2018-19, and now stands at $120.5 billion.
- This year, IBM slowed down after reporting a decline in revenue from cloud computing and artificial intelligence, that the company is hanging its future on, according to a Bloomberg report
Homegrown technology major Tata Consultancy Services surpassed American tech giant in market value, IBM after Monday trade closed.
At the day’s close, TCS’ market capitalization stood at $120.5 billion while that of IBM stood at $119.6 billion, reported the Times of India.
The financial year 2018-19 has proved to be a big one for TCS. The company witnessed a 23% increase in brand value. Its market capitalization crossed the $100 billion mark in 2018 to become the world's third largest IT service brand.
The tale of two IT majors
It is interesting to note that IBM and TCS were partners once. And, IBM had to tried to buy out TCS.
IBM, which entered the Indian market first in the 1950’s, decided to leave in the 1970’s due to India’s intentions to take control of foreign subsidiaries. The heart of this decision was India’s Foreign Exchange Regulations Act, which required most of the foreign companies to divest 60% of the equity of their subsidiaries to local shareholders by the end of 1977.
IBM again entered the Indian market in 1992, with a Tata joint venture, named Tata Information Systems.
A statement from the office of Cyrus Mistry claimed on Tuesday, that Ratan Tata once tried to sell TCS to IBM. The statement said that Tata, who was then heading the joint venture between TCS and IBM, had approached JRD Tata, the chairman of TATA Sons, with a proposal from IBM to buy out TCS.
This, it said, happened when F.C.Kohli, the founding father of the Indian software industry and then TCS boss, was unwell. But the move was rejected by JRD Tata, after consultations with Kohli.