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Investors are buzzing with anticipation as Tata Technologies, part of the esteemed Tata Group, gears up for its groundbreaking initial public offering (IPO). With a valuation of $2.5 billion, discussions with heavyweight investment players such as Morgan Stanley Investment Management, Blackrock, and prominent U.S. hedge funds, including Ghisallo Capital, Oaktree Capital, and Key Square Capital, are underway.
Tata Technologies IPO: A Game-Changer for Tata Group
Founded in 1988, Tata Technologies is a global engineering and product development services company headquartered in Pune, India. With over 12,000 employees across 23 countries, Tata Technologies provides comprehensive engineering services to customers in the automotive, aerospace, industrial, and heavy machinery industries.
The company has been at the forefront of engineering innovation for over 40 years. It has set up state-of-the-art engineering centres in India and has invested heavily in training and developing local talent.
In a significant move, Tata Technologies IPO is poised to become Tata Group’s first IPO in two decades, marking a strategic shift for the conglomerate. The company, known for providing engineering services in the auto and aerospace sectors, aims to offer 9.57 crore shares in its planned IPO, with a face value of ₹2 per share.
As Tata Technologies engages in talks with financial giants, the IPO is gaining momentum, with discussions focusing on the coveted anchor book. This exclusive allocation to high-profile institutional investors before the subscription opens for the public has attracted major interest. Investors are drawn by the allure of the Tata brand, coupled with the company’s profitability and extensive scale.
Rapid Valuation Uptick
Valuation talks indicate a significant uptick, currently standing at $2.5 billion, a remarkable 25% increase from last month. The talks reflect the success of the pre-IPO fundraising, where TPG acquired a 9.9% stake. The IPO, slated to sell a 14-15% stake, is garnering more investor interest than initially anticipated, propelling the valuation to new heights.
Tata Technologies’ stellar financial performance adds to the IPO’s allure. For the nine months ending December 31, 2022, the company reported a 23% growth in profit, reaching ₹4,074 million ($48.9 million), while total income surged by 15% to ₹30.5 billion. These robust figures underline the company’s financial strength and contribute to the optimistic outlook surrounding the IPO.
Tata Technologies IPO Date
The IPO, expected to open for subscriptions around November 21, is poised to be one of India’s most significant public offerings this year. Following in the footsteps of industry giants like Mankind and Blackstone-owned Nexus Malls, Tata Technologies aims to make its trading debut by late November.
Tata Technologies IPO Price
Market experts anticipate an IPO price band ranging between ₹400 to ₹542 per equity share. The grey market premium (GMP) currently hovers around ₹255 per share, reflecting investor eagerness to secure stocks before the official listing on the stock exchange.
Tata Technologies has roped in financial institutions like JM Financials, Citi, and BoFA Securities to facilitate the IPO process.
Financial Growth and Industry Influence
Tata Technologies’ financial year 2022-2023 showcased impressive results, with revenue reaching ₹45 billion, marking a substantial 25.8% increase from the previous year. The profit after tax (PAT) surged to ₹6.2 billion, up from ₹4.4 billion in the preceding year. This robust growth is attributed to strong demand in automotive, aerospace, industrial, and heavy machinery industries.
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