Shares of Tata Technologies rallied over 7% in early trade on Tuesday after the Tata Group company informed exchanges that it has formed a joint venture with BMW Group for delivering automotive software solutions to the German luxury automaker. Both Tata Technologies and the BMW Group will equally hold 50% stakes in the joint venture (JV) company, which will be initially incorporated as a wholly owned subsidiary of Tata Tech. The JV will become part of BMW Group’s global network of software and IT hubs.

Following the announcement, Tata Technologies shares opened higher at ₹1,060 against the previous closing price of ₹1,049.95 on the BSE, extending gains for the second straight session. In the first two hours of trade so far, the newly listed company gained as much as 7.3% to ₹1,126.80, while the market capitalisation increased to ₹45,250 crore.

Tata Technologies, which was listed on the stock exchanges on November 30, 2023, touched its record high level of ₹1,400 on its market debut, while it touched its lowest mark of ₹1,020 on March 26, 2024.

At the current price, shares of Tata Technologies trade 125% higher than its initial public offering (IPO) price of ₹500 apiece. The company, promoted by Tata Motors, raised ₹3,042.51 crore from the IPO, the third-biggest in terms of issue size in 2023. After a stellar debut, the Tata Group stock witnessed consolidation, falling 6% on year-to-date (YTD) business.

In an exchange filing today, Tata Technologies, a global product engineering and digital services company, said it has signed an agreement with the BMW Group to form a JV to establish an automotive software and IT development hub in Pune, Bengaluru and Chennai. The execution of the JV agreement is subject to review and approval by the relevant authorities, it says in a release.

“The main development and operations activities shall be established at Bengaluru and Pune. In Chennai, the focus shall be on business IT solutions, the release notes.

Embodying the ethos of ‘engineer in India for the world’, the JV will leverage Tata Technologies' digital engineering expertise and talent pool in India to contribute to the BMW Group’s strategic expansion of software coding capabilities across global IT hubs.

Warren Harris, CEO and MD of Tata Technologies, said, “Our collaboration with the BMW Group demonstrates our commitment to providing top-tier solutions in automotive software and digital engineering to customers across the world.”

The JV will focus on strategic software development, including solutions for software-defined vehicles (SDV). In automotive software, the focus will be on automated driving, infotainment, and digital services. In business IT, the emphasis will be on digitalisation and automation of product development, production and sales.

“The expansion of international DevOps hubs has clearly proved to be a successful model for the BMW Group. I am therefore extremely pleased that we have found a strong and valued technology partner with Tata Technologies and are now also expanding our footprint in India,” says Alexander Buresch, CIO, and Senior Vice President of BMW Group IT.

The release highlights that the collaboration between Tata Technologies and BMW Group represents a shared vision of innovation and excellence in automotive engineering and digital solutions. From the inception of this JV, 100 trained and experienced Tata Technologies professionals will ensure robust and immediate contributions to software projects. The JV is likely to grow quickly to a four-digit number in the following years, it says.

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