1) Company overview
Tata Technologies is a global product engineering and digital services company and a unit of Tata Motors Ltd. The company is a leading global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs). The company has a workforce of over 11,000 employees spread across 18 global delivery centres.
2) Paid-up and authorised share capitals
Tata Technologies has a paid-up share capital of Rs 811.83 crore and an authorised share capital of Rs 350 crore.
3) Issue structure
The issue is completely an offer for sale (OFS), under which shareholders will offload up to 9.57 crore equity shares, representing 23.60% of its paid-up share capital.
4) Issue size
The size of the IPO wasn’t disclosed. However, according to Krishna Raghavan, Founder, UnlistedKart, a SEBI-registered research analyst firm, Tata Technologies’ recent buyback valued the company at Rs 16,080 crore, indicating that the offered size could be at least Rs 3,800 – Rs 4,000 crore.
5) Selling shareholders
Under the OFS, Tata Technologies’ parent company Tata Motors will offload 8.11 crore shares or a 20% stake in the company. Among other shareholders, Alpha TC Holdings Pte plans to sell up to 97.16 lakh shares (2.40%) and Tata Capital Growth Fund I would offload up to 48.58 lakh equity shares (1.20%). Tata Motors currently holds a 74.69% stake in the company, while Alpha TC Holdings Pte and Tata Capital Growth Fund I have a 7.26% and 3.63% stakes, respectively.
6) Financial performance
For the nine-month period ended December 2022, the company clocked 15% year-on-year growth in revenue at Rs 3,052 crore. The services segment revenue contributed 88% of the total revenue. The company’s net profit during the same period stood at Rs 407 crore.
7) Objects of the offer
According to the DRHP, the company will not receive any proceeds of the OFS from the selling shareholders. Each of them will be entitled to the respective proportion of the proceeds of the IPO after deducting their portion of the offer related expenses and the relevant taxes thereon.
8) Booking running lead managers
JM Financial Ltd, Citigroup Global Markets India and BofA Securities India are the book running lead managers to the issue.
9) Offer structure
About 50% of the offer is reserved for qualified institutional buyers (QIBs), 35% of the issue is reserved for retail investors and 15% for non-institutional investors.
10) Expert view
“Tata Technologies has been at the forefront of driving innovation and providing quality services to its clients, with a significant contribution from its service segment. With a successful IPO, the company will be able to generate more value for its shareholders and continue its growth trajectory. With the backing of its existing promoters and shareholders, Tata Technologies is poised for a bright future,” said Krishna Raghavan of UnlistedKart.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
