Ahead of its forthcoming initial public offering (IPO), Tata Technologies, a part of the prestigious Tata Group, is reportedly in talks with Morgan Stanley Investment Management and several US hedge funds.
What Happened: According to a Reuters report, Tata Technologies is in discussions with Blackrock, Ghisallo Capital, Oaktree Capital, Key Square Capital, and Morgan Stanley about potential participation in the $350-$375 million IPO. Insiders suggest that the IPO could value the company at around $2.5 billion.
The funds are said to be interested in Tata’s anchor book, which reserves shares for significant institutional investors before the subscriptions open for retail and other investors. “Big investors are quite excited by the Tata brand, and a profitable company with scale … that's driving demand,” say sources. The valuation is thought to be around 25% higher than last month when TPG acquired a 9.9% stake in a pre-IPO fundraising round.
See Also: Tata Finally Wraps Up Wistron Acquisition To Become First Indian Company That Makes iPhones
The subscriptions for the IPO are expected to open around November 21, making it one of the largest IPOs in India this year. The company plans to make its trading debut by late November.
Why It Matters: This IPO is significant as it marks Tata Group’s first public issue in nearly two decades. Established in 1989, Tata Technologies has a rich history and is a major player in the engineering services sector, particularly in the automotive and aerospace domains. Despite its significant growth and diversification, Tata Motors remains its largest shareholder and primary customer.
Interestingly, Tata Technologies perceives Tata Elxsi, another firm within the Tata conglomerate, as a competitor, indicating a possible overlap in the services offered by both companies. The IPO is also noteworthy as it is part of a broader Electric Vehicle (EV) play by the Tata Group.
Prior to the IPO, Tata Motors sold a 9.9% stake in Tata Technologies to TPG Rise Climate SF Pte. Ltd and Ratan Tata Endowment Foundation, valuing the company at ₹16,300 crore.
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