Almost 19 years since the last Tata Group firm listed on BSE and NSE, the conglomerate is all set to launch another IPO of Tata Technologies. Dalal Street spectators are eagerly expecting the IPO launch. This will be the first IPO from the group since Tata Consultancy Services (TCS), which got listed on NSE, and BSE in 2004.
According to market experts, a company proposing to list its shares on Indian bourses take 30-45 days in finalising the price band and other formalities. The Tata Technologies IPO date is anticipated to take place at the end of August or in the middle of September 2023, according to stock market experts. As a result, Tata Technologies IPO subscription may start in the next month.
The objectives of the offer, according to Tata Tech IPO Draft red herring prospectus (DRHP), are to carry out an Offer for Sale (OFS) of up to 95,708,984 equity shares by the selling shareholder. The shares are proposed to be listed on BSE, NSE. Tata Motors holds a 74.69% stake in Tata Technologies. Under the OFS, Tata Motors will offload 8.11 crore shares or a 20% stake in the company through the IPO.
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The company in its DRHP stated that the price band and offer price will be determined by them, in consultation with the BRLM, on the basis of assessment of market demand for the equity shares offered through the Book Building Process and on the basis of quantitative and qualitative factors as described below. The face value of the equity shares is Rs 2 each, according to the DRHP.
Tata Technologies IPO has reserved not more than 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15% for Non-Institutional Investors (NII), and not less than 35% of the offer is reserved for Retail Investors. JM Financial Ltd, Citigroup Global Markets India Private Ltd, and BofA Securities India Ltd are the issues book running lead managers (BRLM), and Link Intime India Private Ltd is the registrar to the offer.
Tata Technologies' IPO has already begun receiving signals from the grey market since SEBI gave its approval for its launch. Tata Technologies IPO GMP today or grey market premium is Rs 100, according to people dealing with unlisted securities. Last week, Tata Technologies IPO grey market premium was Rs 105. Tata Tech GMP has risen despite weak stock market sentiments in the week gone. Tata Technologies IPO GMP was Rs 89 in the first week of August.
Comparing Tata Technologies with its peer Cyient, market expert Anuj Gupta noted that the market cap of Tata Technologies would come around to Rs 12,000 crore. "As the company has proposed 405,668,530 shares to list on Indian bourses, Tata Technologies IPO price would come around to Rs 295. So, in case of neck-to-neck valuations, Tata Technologies IPO price can be expected around Rs 295," he said.
As per Anuj Gupta, sometime, a company may offer their stocks at a discount to make it more attractive for investors. In that case, Tata Technologies IPO price may come around Rs 265 to Rs 270 per equity share. "However, in case of high response expectations, companies also try to maximise its return and hence they offer their stock at higher valuations by same percentage points. In that case, Tata Technologies IPO price can be expected around Rs 315 to Rs 320 per equity share," Gupta said.
According to experts, these are the top reasons to consider investing in Tata Technologies IPO
-Tata name carries years of trust and legacy.
-The mid-cap company is a global engineering company that primarily offers services and technology solutions to leading OEMs and their tier-I suppliers.
-Tata Technologies is one of the leading players in automotive ER&D services globally.
-Deep domain knowledge and expertise in the automotive industry.
-Offering end-to-end solutions for EV development, manufacturing and after-sales services.
-Global player with marquee clients from Europe, North America, and Asia Pacific.
-A material portion of their revenue comes from the top 5 clients.
-They derive their revenue primarily from the automotive industry, and its performance can impact the company’s operation, cash flow, and revenue.
-Uncertainties in the EV sector can impact future operations and cash flow.
Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Business Today. Investors should consult their financial advisors before taking any position.