Tata Motors has made a lot of progress in the last few decades and to take this progress further, Tata Technologies (Tata Technologies IPO) Limited, a subsidiary of Tata Motors, is going to do something that will take this company further. The company is going to open on November 22 and is preparing for its Offer-for-Sale (OFS).
This development marks an important milestone for the Tata Group, as it is the first company to file. After leading Tata Consultancy Services (TCS) in 2004, IPO in almost two decades. OFS will run till 24 November.
Tata Technologies, which specializes in engineering services for the aerospace and automotive industries, filed a draft red herring prospectus in March, indicating its intention to go public. Existing shareholders may sell up to 9.57 crore equity shares as part of the IPO, which is set up as an Offer for Sale.
This represents roughly 23.60 percent of the company’s total paid-up share capital. On November 24, the 60,850,278 equity shares that are up for bid will be closed.
The breakdown of the OFS includes up to 46,275,000 equity shares by the company, 9,716,853 by Alpha TC Holdings Pte Ltd, and 4,858,425 by Tata Capital Growth Fund I, representing 11.41 percent, 2.40 percent, and 1.20 percent of the paid-up equity share capital of Tata Technologies Limited, respectively. This information was disclosed in an exchange filing on November 13.
Tata Technologies IPO Has Outlined the Share Allocation
Tata Technologies has outlined the share allocation for the IPO (Tata Technologies IPO), with 50 percent earmarked for Qualified Institutional Buyers (QIBs), 35 percent for retail investors, and the remaining 15 percent for non-institutional investors.
In a move to engage existing shareholders, the IPO includes a reservation of up to 6,085,027 equity shares, equivalent to 10 percent of the offer, for subscription by eligible shareholders of Tata Motors Limited (TML). This encompasses individuals and Hindu Undivided Families (HUFs) who are public equity shareholders of TML as of the RHP filing date on November 13, 2023.
Reports suggest that Tata Technologies has been in talks with notable US asset managers, including Ghisallo Capital, Oaktree Capital, Key Square Capital, Blackrock, and Morgan Stanley. The valuation for the deal is estimated to be around $2.5 billion, as per sources cited by Reuters.
The IPO announcement comes against the backdrop of Tata Motors reporting a consolidated net profit of Rs 3,783 crore in the July-September quarter, attributing the positive results to the performance of its British arm, Jaguar Land Rover. This marks the fourth consecutive quarter of positive results for the Indian automaker, a stark contrast to the consolidated net loss of Rs 945 crore reported in the same quarter last fiscal year.
As Tata Technologies (Tata Technologies IPO) ventures into the public market, the IPO is poised to attract attention not only due to its historical significance within the Tata Group but also against the backdrop of a resurgent auto sector and the company’s strategic positioning in engineering services for key industries. Investors are likely to scrutinize this offering as they navigate the evolving landscape of the Indian stock market.