Way back in March, news broke about the Tata Group launching its first IPO in nearly two decades. We were told it's likely to offload 9.57 crore shares by September, but that hasn't happened yet.

It's always exciting when a conglomerate that's older than the Indian stock market itself decides to list a new firm. And this time it's Tata Technologies, an engineering services firm in the automotive and aerospace sector, among others—but we think its IPO hasn't been talked about enough since then.

However, Tata Tech has an interesting position in the group's portfolio—and a strange history.

Tata Technologies History

Tata Technologies started out in 1989 as the automotive design unit of Tata Motors but was spun off five years later as a separate company, going on to expand into aerospace engineering and other areas. Even with all that, Tata Motors remains its biggest shareholder and customer.

Curiously, Tata Tech lists another sister firm, Tata Elxsi, as its competitor, meaning that there's some overlap in what both these firms do.

There's more: Tata Motors had unsuccessfully tried to sell its stake in the unit before to pare down its debt. In fact, the IPO will not hand Tata Tech any fresh cash but will rather see Tata Motors and two other investors sell off their stakes in the firm.

Tata Motors And The Big EV Play

So why have an IPO at all? In papers filed with SEBI, the company says it would help its "visibility and brand image". But for now, the listing seems to be just a way to give Tata Motors a healthy exit and some handy cash. To that end, Tata Motors just sold a 9.9% stake in the unit to TPG Rise Climate at a valuation of nearly $2 billion.

But wait. There's one little detail that caught our attention. TPG Rise Climate previously invested $1 billion in Tata.ev, another Tata Motors unit, which is building electric cars! It wouldn't be a stretch to imagine a bigger play here: Tata Tech may just be a piece of the EV puzzle that Tata wants to crack before anyone else in India—especially as Elon Musk's Tesla knocks on the door.

Tata has been ahead of most in the EV space, having one of the cheapest electric cars in India at the moment and a future bet on EV infrastructure via Tata Power. Tata Motors hasn't been shy about its target to pivot towards more eco-friendly cars either. It just so happens that Tata Tech makes a big song and dance of being an end-to-end EV engineering solution provider all across its website. 

Coincidence? We can't say for sure.

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