Tata Technologies IPO: 10 things to know ahead of issue opening on November 22

As the much-awaited initial public offer (IPO) of Tata Technologies is set to open for public subscription on November 22, ETMarkets lists 10 things you must know before the issue opens.

The three-day issue will close on November 24 and the price band for the same will be announced soon.

Tata Technologies is a leading global engineering services company offering product development and digital solutions to global original equipment manufacturers (OEMs). The company services include concept design, tear-down and benchmarking, vehicle architecture, body and chassis engineering, electrical and electronics systems, and diagnostics. It has a workforce of over 11,000 employees spread across 18 global delivery centres.

Here are 10 things worth noting about the issue:

1) This IPO is entirely an offer for sale (OFS) wherein the selling shareholders, including promoter Tata Motors, will receive the entire proceeds from the issue.

2) Under the OFS, parent Tata Motors will sell 4.62 crore shares, Alpha TC Holdings will offload 97.1 lakh shares and Tata Capital Growth Fund will give up 48 lakh shares.

3) The issue size has been reduced from an earlier 9.57 crore shares to 6.08 crore equity shares now.4) The company had filed its IPO papers with Sebi in March this year and received approval from the regulator in June.

5) In the issue, Tata Technologies has reserved a 10% quota for Tata Motors’ eligible shareholders.

6) In the grey market, the company’s shares are commanding a premium of Rs 270-285.

7) The weighted average of the cost of acquisition for Tata Motors is Rs 7.40/share; Rs 25.10 for investors Alpha TC Holdings and Tata Capital Growth Fund I according to the Draft Red Herring Prospectus (DRHP) filed by the company with Sebi.

8) Tata Tech was last valued at around $2 billion (Rs 16,300 crore), when TPG Climate picked up about a 9% stake in the company.

9) For the nine-month period ended December 2022, the company clocked a 15% year-on-year (YoY) growth in revenue at Rs 3,052 crore. The service segment revenue contributed 88% of the total revenue. The company’s net profit during the same period stood at Rs 407 crore. Over FY 2021-23, its revenue grew at a compound annual growth rate (CAGR) of 30%, leading to a 46% EBITDA CAGR. PAT for the same period increased at a CAGR of 61.5%.

10) JM Financial, Citigroup Global Markets India, and BofA Securities India are the book-running lead managers to the IPO. The name of the registrar is Link Intime India Private Limited.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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