Tata Tech IPO breaks records! Issue subscribed 69 times; receives highest-ever applications

Smashing many records, the initial public offer (IPO) of Tata Technologies Ltd, the global engineering services company and Tata Motors arm, has been subscribed record 69.43 times on the final day of bidding today. The public issue received an overwhelming response as investors placed 2,83,19,60,790 bids against the total issue size of 4,50,29,207. The total number of bids received at the cut-off price stands at 40,32,06,240.

The issue was subscribed the most by qualified institutional buyers, with the quota subscribing a record 203.41 times. Of the total 1,05,47,382 shares on offer, the company received 2,13,83,89,020 bids under this category. The portion set aside for non-institutional investors was subscribed 62.11 times, receiving bids for 49,02,17,160 shares against 79,10,537 shares on offer.

Shareholders, retail investors and employees were subscribed 29.19, 16.50 and 3.70 times, respectively, on the final day.

Amid the investor frenzy, the shares of the Tata Motors subsidiary are commanding around 80% premium over the IPO price in the unregulated grey market.

According to financial services company Nuvama Wealth, a total of 73.5 lakh applications have been received for the Tata Technologies IPO, thus creating created record in terms of applications, too. The total applications for the public issue of Tata Technologies surpassed even those received for the much-publicised public issue of Life Insurance Corporation (LIC), which had garnered 73.38 lakh applications.

It is also the best IPO performance for a Tata group company so far, surpassing TCS’ record in 2004, which was subscribed seven times at that time. TCS had come out with its IPO in July 2004, with a price band of ₹775-900 per share. The TCS shares were listed on August 25, 2004, at a premium of 26.6% at ₹ 1,076 apiece.

Overall, the Tata Technologies IPO has 60,850,278 equity shares on offer, of which 18,457,919 shares will be allotted to retail investors, 10,547,382 shares to qualified institutional buyers, and 7,910,537 shares to non-institutional investors. The shares offered to anchor investors stand at 15,821,071.

The issue grabbed investors attention since the first day of the IPO launch on November 22, 2023. The issue was fully subscribed to within an hour of the bidding process. The ₹3,042.51 crore IPO is the first issue from the group firm in nearly two decades (18 years) after TCS.

The price band for the issue has been fixed at ₹475-500 per share, and it’s completely an offer for sale (OFS) by existing shareholders. The shares of the Pune-based company are slated to be listed on the BSE and NSE on December 5, 2023.

Market analysts see the IPO is coming at a very attractive valuation of 32.5x, and termed it a “great opportunity” for investors to encash “listing gains as well as for long-term benefits”.

Tata Technologies, a subsidiary of Tata Motors, has expertise in the automotive industry and also serves clients in adjacent industries, such as aerospace and transportation and construction heavy machinery (TCHM). As of Sep’23, its workforce stood at 12,451.