The Securities and Exchange Board of India (SEBI) has greenlit the IPO of Tata Technologies, which is set to mark the Tata Group’s first public issue in nearly two decades.
What Happened? Tata Technologies filed its IPO papers with SEBI in March, and the offering will consist entirely of an offer for sale (OFS), with current stakeholders divesting up to 9.57 crore shares, or 23.60% of the company’s paid-up share capital. The IPO reserves 50% of the offering for qualified institutional buyers (QIBs), 35% for retail investors, and 15% for non-institutional investors.
This IPO is set to see the Tata Group return to the public markets after 19 years. The conglomerate’s last IPO was that of IT major Tata Consultancy Services (TCS) in July 2004.
Tata Technologies, spun off from Tata Motors, is a global engineering services company that offers product development and digital solutions to global original equipment manufacturers (OEMs).
In the IPO, Tata Motors will sell 8.11 crore shares of its subsidiary, while two other shareholders, Alpha TC Holdings and Tata Capital Growth Fund I, will also participate in the offering.
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Tata Technologies also services adjacent sectors, such as aerospace, transportation, and heavy machinery for construction.
While the exact size of the IPO has not been disclosed, estimates peg it to be at least ₹4,000 crore. The price band will be determined in consultation with the book-running lead managers based on market demand.
For the nine-month period ending December 2022, the company reported a revenue from operations of ₹3,011.79 crore, representing a growth of 15.5% compared to the same period in the previous year, while its net profit stood at ₹407.47 crore.
In the unlisted market, Tata Technologies is seen as one of the most sought-after stocks following NSE and Reliance Retail.
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