Are you ready for one of the most highly anticipated IPOs of the year? Tata Technologies IPO is set to open on November 22, and investors and enthusiasts eagerly await this major financial event. But before you make any decisions, having all the facts is critical.
This comprehensive guide will provide crucial insights into the Tata Technologies IPO, helping you make well-informed choices. Don’t miss this opportunity to learn more about the Tata Tech IPO.
Overview of Tata Technologies IPO
Tata Technologies, a global engineering services company under the esteemed Tata Group, is gearing up for its IPO on November 22. As the company ventures into the public market, understanding the intricacies of this financial move becomes paramount.
Background of Tata Technologies
Founded in 1994, Tata Technologies has a rich history of providing top-notch product development and digital solutions. A significant player in the engineering services sector, the company caters to global original equipment manufacturers (OEMs) and their tier-I suppliers.
Tata Technologies specializes in various services, including concept design, tear-down, benchmarking, vehicle architecture, body and chassis engineering, and electrical and electronics systems. With over 11,000 employees across 18 global delivery centers, the company has solidified its presence in the industry.
Key IPO Details To Know
1. Offer-for-Sale (OFS) Structure
The Tata Technologies IPO is structured as an Offer-for-Sale (OFS), wherein selling shareholders, including promoter Tata Motors, will receive all the proceeds from the issue.
2. Total Equity Shares and Fundraising
Tata Technologies plans to raise Rs. 3,042.51 crore by offering 6,08,50,278 equity shares with a face value of Rs. 2 each. Notably, the company itself won’t receive any proceeds from the issue. 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 under the OFS.
3. Key Dates
Investors should mark their calendars for the three-day IPO window, closing on November 24. The share price band is 475 -500 per equity share.
4. Lot size
Bids can be made for a minimum of 30 equity shares and multiples of 30 equity shares thereafter.
5. Reduction in Issue Size
The issue size of the company’s IPO has been reduced to 6.08 crore equity shares, down from the planned 9.57 crore shares. The IPO papers were filed with Sebi in March and approved in June, and the issue size is expected to be between Rs 2,890 crore and Rs 3,042 crore.
6. Reserved Quota for Tata Motors’ Shareholders
Tata Technologies has reserved a 10% quota for Tata Motors’ eligible shareholders, offering them an exceptional opportunity to participate in the IPO.
7. Grey Market Premium
Tata Technologies’ shares command a premium of Rs 270-285 in the grey market, indicating robust market interest and confidence.
8. Cost of Acquisition and Company Valuation
The acquisition cost for Tata Motors is Rs 7.40/share, while for Alpha TC Holdings and Tata Capital Growth Fund I, it stands at Rs 25.10. as per the Draft Red Herring Prospectus (DRHP).
9. Financial Performance and Growth Metrics
For the nine months ending December 2022, Tata Technologies achieved a 15% YoY growth in revenue, with the service segment contributing 88% to the total revenue. The company recorded a net profit of Rs 407 crore, indicating a strong financial position.
10. Book-Running Lead Managers and Registrar Details
JM Financial, Citigroup Global Markets India, and BofA Securities India are the book-running lead managers for the IPO, with Link Intime India Private Limited serving as the registrar.
In conclusion, the Tata Technologies IPO is a significant event in the financial landscape, offering investors a chance to be part of a globally renowned engineering services company. The comprehensive overview provided here is a valuable resource for those looking to navigate the complexities of this offering. As the IPO opens on November 22, staying informed about the critical aspects highlighted in this article will empower potential investors to make sound decisions.
How can I participate in Tata Technologies' IPO?
Participating in the Tata Technologies IPO is a straightforward process. Investors can do so through their registered demat accounts with authorized brokerage firms. Ensure you have completed the necessary KYC procedures and have the funds in your trading account to subscribe to the IPO.
What is the significance of the reserved quota for Tata Motors' shareholders?
The reserved 10% quota for Tata Motors' eligible shareholders is a unique feature of this IPO. It provides an exclusive opportunity for existing shareholders of Tata Motors to participate in the offering, reinforcing the company's commitment to its stakeholders.
Why did the company reduce its issue size?
The reduction in the issue size, from the initially planned 9.57 crore shares to the current 6.08 crore equity shares, could be influenced by market conditions and strategic considerations. Companies often adjust their offerings based on various factors to ensure optimal results for the company and its investors.
How does the grey market premium impact the IPO?
The grey market premium reflects market sentiment, indicating the difference between the IPO's market price and its official issue price. Tata Technologies' case shows that a positive premium suggests high demand and confidence among investors. However, it's crucial to note that grey market premiums are unofficial and can fluctuate.
Who are the book-running lead managers for Tata Technologies' IPO?
The book-running lead managers play a crucial role in the IPO process. Tata Technologies, JM Financial, Citigroup Global Markets India, and BofA Securities India have taken up this responsibility. They are responsible for effectively executing the IPO and ensuring a smooth transition to the public market.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.