The eagerly anticipated initial public offering (IPO) of Tata Technologies is set to open for public subscription on November 22, concluding on November 24. This IPO, entirely comprising an offer for sale of up to 6.08 crore equity shares for cash, has undergone a reduction from the initially planned 9.57 crore shares.
Under the offer for sale (OFS) structure, Tata Motors, as the parent company, will divest 4.62 crore shares, Alpha TC Holdings will unload 97.1 lakh shares, and Tata Capital Growth Fund will relinquish 48 lakh shares.
The pricing details for the issue are forthcoming. The company had initially filed its IPO papers with SEBI in March, securing regulatory approval in June. Notably, Tata Technologies has allocated a 10% quota for eligible shareholders of Tata Motors in the offering.
In the grey market, the company’s shares are currently commanding a premium of Rs 270-285, with expectations of a further increase upon the official announcement of the issue launch.
Tata Technologies, a prominent global engineering services company, specializes in providing product development and digital solutions to international original equipment manufacturers (OEMs). The company’s array of services encompasses concept design, tear-down and benchmarking, vehicle architecture, body and chassis engineering, electrical and electronics systems, and diagnostics. With a workforce exceeding 11,000 employees distributed across 18 global delivery centers, Tata Technologies is a key player in the engineering services domain.
The valuation of Tata Tech in its last assessment stood at approximately $2 billion (Rs 16,300 crore) when TPG Climate acquired a 9% stake in the company. For the nine-month period ending December 2022, the company reported a noteworthy 15% year-on-year (YoY) growth in revenue, reaching Rs 3,052 crore. The service segment revenue contributed 88% to the total revenue, with a net profit of Rs 407 crore during the same period.
Over the fiscal years 2021-2023, Tata Technologies demonstrated robust financial performance, achieving a compound annual growth rate (CAGR) of 30% in revenue and a 46% CAGR in EBITDA. The profit after tax (PAT) for the same period experienced a significant CAGR of 61.5%.
JM Financial, Citigroup Global Markets India, and BofA Securities India have been appointed as the book-running lead managers for the IPO.
