Tata-controlled CMC Ltd has filed a draft prospectus with Securities and Exchange Board of India for its proposed initial public offering to divest Centre's 26.25 per cent stake in the software firm.

The Divestment Development: Complete Coverage

The company plans to offer 39.76 lakh (3.97 million) equity shares to the public or private investor and has appointed HSBC Securities and Capital Markets (India) Pvt Ltd and Enam Financial Consultants Pvt Ltd, as lead managers for the offer, CMC said in its Red Herring prospectus.

The Tatas had initially bought the government's 51 per cent stake in CMC through group holding company Tata Sons Ltd, which was later increased to 67 per cent through an open offer.

The shares are to be tendered through a book-building process only after Tata group disclosed its intention of not buying the remaining stake.

CMC, under the risk factors, said that two-thirds of its revenues were from the government and its entities and warned that any decline in business from clients may "adversely" impact revenues and profitability.

The company also said there was no assurance of "repeat business" orders from these clients.