The Tata Group is set to make its first initial public offering (IPO) in nearly two decades with Tata Technologies. As investors gear up for the opening of the issue on November 22nd, it is crucial to be aware of the following ten key points:
1) IPO Details: The IPO will run for three days until November 24th. The price band for each share is set between ₹475-500, with a minimum lot size of 30 equity shares and its multiples thereof. Analysts estimate the post-issue market cap to be between ₹19,269 crore and ₹20,283 crore.
2) Positive Outlook: Analysts hold a positive view on the Tata Technologies IPO due to the company’s robust business prospects, strong parentage, and commendable financial performance. With improving margins and ratios, experts recommend subscribing to the IPO for long-term gains and a promising listing.
3) Offer-For-Sale (OFS) Structure: The IPO comprises an entirely OFS structure, where the selling shareholders will receive the entire proceeds. The offering aims to raise ₹3,042.51 crore through the sale of 6.08 crore equity shares.
4) Selling Shareholders: Tata Motors, the parent company, will be offloading 4.62 crore shares, while Alpha TC Holdings and Tata Capital Growth Fund will sell 97.1 lakh and 48 lakh shares, respectively. The IPO size has been reduced from 9.57 crore shares to 6.08 crore shares.
5) Shareholding Pattern: Before the offer, Tata Motors held 64.79% of the paid-up equity share capital. Tata Motors Finance, Alpha TC Holdings, and Tata Capital Growth Fund held 2%, 7.26%, and 3.63%, respectively, making the total shareholding 77.68%.
6) Reservation Quotas: A 10% reservation has been set aside for Tata Motors’ eligible shareholders. Qualified institutional bidders have a reservation of 50%, non-institutional investors 15%, and retail investors 35%.
7) Financial Performance: On a consolidated basis, Tata Technologies reported a turnover of ₹2,381 crore, ₹3,530 crore, and ₹4,414 crore for FY21, FY22, and FY23, respectively. The net profit for the same period was ₹239 crore, ₹427 crore, and ₹624 crore.
8) Growth Trajectory: Emkay Global noted that Tata Tech’s growth trajectory, while slower compared to its peers, has improved in the last three years. However, performance may be affected by the completion of a large full-vehicle development project. This factor has been considered in the IPO valuations.
9) Company Background: Established in 1994, Tata Technologies is a global engineering services company specializing in product development and digital solutions. With expertise in the automotive sector, the company has expanded into aerospace and heavy construction machinery. It currently has 12,451 employees.
10) Lead Managers and Listing: JM Financial, Citigroup Global Markets India, and BofA Securities India are the book-running lead managers for the IPO. The shares will be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on December 5th.
Through these key points, investors can gain a comprehensive understanding of the Tata Technologies IPO and make informed investment decisions.
Q: What is the price band for Tata Technologies IPO?
A: The price band for Tata Technologies IPO is between ₹475-500 per share.
Q: How many equity shares are being offered in the IPO?
A: The IPO aims to sell 6.08 crore equity shares.
Q: Who are the selling shareholders in the Tata Technologies IPO?
A: Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund are the selling shareholders.
Q: When will the shares be listed?
A: The shares will be listed on both NSE and BSE on December 5th.