Precisely how much closely held UPS hopes to raise, won't be known until an initial offering price is set weeks or months from now. But analysts and people familiar with UPS's plans say the sale should generate at least $3 billion (around Rs 12,975 crore) and perhaps much more, based on UPS's recent financial performance and the current valuations of competitors. The two largest previous public offerings were Conoco Inc. in October 1998, which raised $ 3.96 billion, and Goldman Sachs Group Inc. earlier this year, which raised $ 2.93 billion, according to Thomson Financial Securities Data.UPS's 125,000 current shareholders -- mostly employees and retirees -- will also be free to sell their shares on the open market once the publicoffering is completed late this year. As a result, Atlanta-based UPS, with revenue of $ 24.78 billion in 1998, will instantly become one of the largest publicly traded companies in the world.

The announcement stunned the transportation industry. For decades, UPS brushed off suggestions that the company should go public, insisting that it performed best without having to deal with nettlesome Wall Street analysts or outside investors. As recently as a month ago, UPS chairman James P. Kelly insisted after a speech that the company wasn't interested in a public offering.

Wednesday, Kelly said top managers and the board concluded that the time had come for UPS to "add another club to the bag" in its global competition with FedEx parent FDX Corp. and an array of increasingly aggressive postal agencies in the US and other countries. He said UPS has no specific expansion plans related to the offering. Instead, the offering sets the table for potential acquisitions or major moves by UPS in the future."To say itcandidly, we don't need the money," Kelly said, citing the company's current cash reserves of $ 3.4 billion. "In this quickly changing global market, we determined that it was something we needed to do, to create a new currency," Kelly said. "We thought we needed the extra financial flexibility for acquisitions and other business developments, including e-commerce opportunities... some people don't want to do cash deals. This is an alternative."

Analysts said a publicly traded UPS could be embraced by Internet investors, in the same way that the share prices of FDX, the parent of FedEx, and Airborne Freight Corp. moved up strongly last year as "indirect Internet" plays. UPS's vast ground-based delivery system is used extensively for deliveries to homes from mail-order and Internet retailers.

"The timing is perfect," said Edward M. Wolfe, an analyst at Deutsche Banc Alex. Brown in New York. "With all this attention being paid to e-commerce and deliveries to people's residences, the world has finallyfigured out FedEx isn't the one delivering those packages. It's UPS and the Postal Service."

UPS said its decision wasn't triggered by recent gains in competitor's shares. But UPS managers must have taken note as FDX shares rose, first during a Teamsters strike against UPS in 1997 and then on Internet speculation last year. Partly as a result of that rise in share price, FDX was able to acquire Caliber System Inc., whose RPS was the only major competitor to UPS's ground-based package-delivery system.

Since the strike ended nearly two years ago, UPS has consistently posted strong financial results. Even FDX executives have privately marveled at the performance. UPS slashed its costs, in part by never rehiring thousands of workers who left their jobs during the strike. Meanwhile sales of its most profitable services -- such as international express deliveries -- skyrocketed. The company posted net income of $ 1.74 billion in 1998.