Listing Gains After IPO? Here's What Tata Technologies' GMP Looks Like

Tata Technologies is gearing up for its IPO, which will be the first public listing from the Tata Group in two decades, and the grey market is signalling a strong start.

What Happened: The IPO is scheduled to open on November 24 and close on November 25, making it the first public offering by the Tata Group since Tata Consultancy Services (TCS). In the grey market, the company’s shares are trading at a premium of ₹353. The IPO is priced in the range of ₹475-₹500, and investors can bid for a minimum of 30 shares in one lot.

At the upper price band, the issue size stands at around ₹3,042 crore. It’s an offer for sale (OFS) of 6.08 crore shares, involving Tata Motors, Alpha TC Holdings and Tata Capital Growth Fund.

See Also: Tata Technologies IPO Opens Nov. 22: What Are Analysts Saying

Tata Technologies, a manufacturing-focused engineering research and development company, is actively engaged with seven out of the top 10 automotive ER&D spenders globally and five out of the 10 prominent new energy ER&D spenders as of 2022. Its primary services include providing outsourced engineering services and digital transformation services to global manufacturing clients, assisting them in conceiving, designing, developing and delivering superior products.

Key strengths of the company include differentiated capabilities in new-age automotive trends like electric vehicles, deep expertise in the automotive industry, and a global delivery model facilitating intimate client engagement and scalability.

Getting Into The Numbers: Analysts value the company at a price-to-earnings multiple of 32.5x, with a post-issue market cap of ₹20,283 crore and a return on net worth of 20.8%.

For the six months ending September 2023, Tata Technologies reported a 35% year-on-year increase in total income to ₹2,587 crore, with a net profit surge of 36% to ₹352 crore in the same period.

The IPO reserves 50% for qualified institutional buyers, 35% for retail investors and 15% for non-institutional investors. Additionally, Tata Technologies has allocated a 10% quota for Tata Motors’ eligible shareholders.

Lead managers for the IPO include JM Financial, Citigroup Global Markets India, and BofA Securities India, with Link Intime India serving as the registrar.

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