Tata Group’s engineering services company Tata Technologies has raised ₹791 crore from 67 investors via anchor book on Tuesday, November 21, a day before its initial public offering (IPO) opens for bidding. The funds were raised at the upper limit of the ₹475-500 price range.
Tata Technologies IPO, which will be the first public offer from Tata Group company in almost 20 years, will open for bidding on November 22 and will close on November 24.
“Tata Technologies in consultation with the book running lead managers has finalised allocation of 1,58,21,071 equity shares to anchor investors, at a price of ₹500 per share,” the company said in its filing to exchanges.
The Tata group company has fixed Tata Technologies IPO price band at ₹475 to ₹500 per share levels. Tata Technologies Ltd aims to raise ₹3,042.51 crore from this initial offer, which is completely offer for sale (OFS) in nature.
The company has set aside 20.28 lakh equity shares for its employees and 60.85 lakh for Tata Motors shareholders. The net issue of the IPO, excluding the portions allocated to employees and shareholders, constitutes the overall offering.
Fifty percent of the total offer size has been allocated to qualified institutional buyers, while 15 percent is earmarked for high net worth individuals. The remaining 35 percent is set aside for retail investors.
According to market analysts, Tata Technologies IPO shares were trading at a significant 70 percent premium in the grey market above the upper price band. The grey market serves as an informal platform for trading IPO shares until their official listing.
According to market observers, Tata Technologies IPO grey market premium (GMP) today is ₹351, which is unchanged from yesterday’s GMP of ₹351. This means, Tata Technologies IPO GMP has remained steady despite choppy trends on Dalal Street.
Tata Technologies IPO allotment date is most likely on 27th November 2023 whereas most likely Tata Technologies IPO listing date is 29th November 2023.
Arihant Capital has recommended ‘apply’ tag to the public offer citing, “Tata Technologies Limited provides a diverse range of services encompassing IT consultancy, SAP implementation, and CAD/CAM engineering and design consultancy. The revenue breakdown as of FY23 indicates approximately 80% from services, 11% from products, and 9% from education. Strong partnerships, including with Dassault and Siemens, and utilization of Microsoft AZURE products enable global expansion. Recent empanelment by Airbus signals significant growth potential.The company’s revenue and PAT demonstrated a CAGR of 36% and 62%, respectively, from FY21 to FY23. In H1FY24, there was a 34% and 36% YoY growth in revenue and PAT. Robust earnings growth is anticipated moving forward. Tata Technologies has outpaced Tata Elxsi, L&T Technologies, and KPIT Technologies in revenue CAGR over the last three years. At an upper band valuation of ₹500, the issue’s valued at a PE ratio is 32.5x based on FY23 EPS. We recommend subscribing to the issue for both short-term listing gains as well as long-term investment prospects.”
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
