Tata Tech IPO opens on November 22; 1st Tata group issue in 18 yrs

The Initial Public Offering (IPO) of Tata Group's engineering and product development services company Tata Technologies Ltd will be launched on November 22, 2023, the first Tata Group IPO in nearly two decades (18 years).

The public issue will close on November 24, 2023. "This IPO will be open for subscription by the public on Wednesday, November 22, 2023 and shall close on Friday, November 24, 2023," Tata Motors says in a stock exchange filing.

The IPO is an 'Offer For Sale' (OFS) of up to 60,850,278 equity shares for cash, comprising of offer for up to 46,275,000 shares; up to 9,716,853 shares by Alpha TC Holdings Pte Ltd.; and up to 4,858,425 shares by Tata Capital Growth Fund I, each representing up to 11.41%, 2.40%, and 1.20%, respectively, of the paid-up share capital of Tata Technologies Limited.

The Tata Tech IPO reserves up to 6,085,027 shares, i.e., 10% of the offer, for subscription by eligible shareholders of TML, i.e., individuals and HUFs who are the public equity shareholders. The price band for the IPO will be decided soon by the company.

Reacting to the development, shares of Tata Motors Ltd surged 0.69% or 4.5 points to ₹657.60 in the opening trade on the BSE. At the current share price, m-cap of the company stands at ₹2,18,460.84 crore.

Tata Technologies had filed a draft document with market regulator Securities and Exchange Board of India (SEBI) to launch an IPO in March 2023. SEBI approved the much-awaited public issue in June 2023.

Tata Consultancy Services (TCS) was the last Tata group company to go public in 2004 when Tata Sons sold part of its stake in the IT services firm to list the shares on the domestic stock exchanges.

As per the current shareholding pattern, Tata Motors owns a 74.69% stake in Tata Technologies, while Alpha TC Holdings Pte and Tata Capital Growth Fund I hold 7.26% and 3.63%, respectively, in the company.

The Pune-based Tata Group company provides services in engineering and design, product lifecycle management, manufacturing, product development, and IT service management to automotive and aerospace original equipment manufacturers and their suppliers. It has over 11,081 employees and 18 delivery centres in the U.S., Europe, India, China, Japan, and Singapore.

Tata Tech mostly relies on the Tata group for business, especially Tata Motors and Jaguar Land Rover, and has reported a net profit of ₹407.47 crore during the nine months ended December 2022 compared to ₹331.36 crore last year.

In November last year, another Tata group company Tata Play, previously known as Tata Sky, had also filed a draft red herring prospectus with the SEBI under the "confidential pre-filing" to launch its public offer. It is the first company in India to take a "confidential pre-filing" route for its IPO.