Tata group company Tata Technologies Ltd has set the price band of its initial public offering (IPO) at ₹475-500 per share. The price band is about 47% lower from the stock's current grey market price of ₹950 per share. The lot size has been fixed at 30 equity shares and its multiples thereof.
At the upper price band, the Tata Motors subsidiary will fetch around ₹3,042.5 crore, and its valuation will stand at ₹20,283 crore. Tata Technologies IPO will be launched on November 22, 2023, and will close on November 24, 2023. It is the first IPO of a Tata Group company in 18 years.
For retail investors, the minimum investment of ₹15,000 for 30 shares can be done, and the maximum investment they can make is ₹1.95 lakh (390 shares).
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.
The Tata Tech IPO has reserved up to 6,085,027 shares, i.e., 10% of the offer, for subscription by eligible shareholders of Tata Motors.
Tata Tech reported a consolidated net profit worth ₹351.9 crore in the quarter ending September 2023 as compared to ₹259 crore in the year-ago period. For the year ending March 31, 2023, the company's net profit was recorded at ₹624 crore vs ₹436 crore in the same period in the previous year.
The company's total income as of Q2 FY24 stood at ₹2,587 crore as compared to ₹1,910 crore in the same period last year. For the fiscal year ending March 31, 2023, the company recorded a total income of ₹4,501 crore as compared to ₹3,578 crore in the same period the previous year.
Tata Technologies had filed a draft document with the 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.
Tata Motors shares are trading 0.74% up at ₹676.65 in the opening trade on the BSE today.