Tata Group’s engineering services company Tata Technologies rose ₹791 crore from 67 investors through an anchor book on Tuesday, November 21, a day before its initial public offering (IPO) opens for bidding. The funds were collected at the ceiling of the ₹475-500 price range.
The Tata Technologies IPO, which will be the first public offering by a Tata Group company in nearly 20 years, will open for bidding on November 22 and close on November 24.
“Tata Technologies is in consultation with the lead book managers after finalizing the allotment of 1,58,21,071 equity shares to anchor investors, at a price of ₹500 per share,” the company said in its filing to exchanges.
The Tata group company is set Tata Technologies IPO price bond at ₹475 to ₹500 per share levels. Tata Technologies Ltd aims to raise ₹3,042.51 crore from this initial offer, which is an offer for sale outright (OFS) in nature.
The company has set aside 20.28 lakh equity shares for its employees and 60.85 lakh for Tata Motors shareholders. The net issue of the IPO, excluding the portions allocated to employees and shareholders, is the entire offering.
Fifty percent of the total offer amount is allocated to qualified institutional buyers, while 15 percent is reserved for high net worth individuals. The remaining 35 percent is set aside for retail investors.
According to market analysts, the Tata Technologies IPO shares were trading at a significant 70 percent premium in the gray market above the upper price band. The gray market acts as an informal platform for trading IPO shares until their official listing.
According to market observers, Tata Technologies IPO (GMP) is gray market premium today ₹351, which is unchanged from yesterday’s GMP ₹351. This means, Tata Technologies IPO GMP remained steady despite choppy trends on Dalal Street.
The allotment date of Tata Technologies IPO is 27 November 2023, and the listing date of Tata Technologies IPO is likely to be 29 November 2023.
Arihant Capital suggested an ‘implement’ tag on the public offering stating, “Tata Technologies Limited provides a diverse range of services that include IT consultancy, SAP implementation, and CAD/CAM engineering and design consultancy. The revenue breakdown from FY23 shows about 80% from services, 11% from products, and 9% from education Strong partnerships, including with Dassault and Siemens, and the use of Microsoft AZURE products enables global expansion. Recent work by Airbus shows significant growth potential. The company’s revenue and PAT showed a CAGR of 36% and 62%, respectively, from FY21 to FY23. In H1FY24, there was 34% and 36% YoY growth in revenue and PAT. Strong earnings growth is expected going forward. Tata Technologies has made progress Tata ElxsiL&T Technologies, and KPIT Technologies in revenue CAGR over the past three years. Valuing an upper band of ₹500, the issue value is 32.5x on PE ratio based on FY23 EPS. We recommend subscribing to the issue for short-term subscription gains as well as long-term investment prospects.”
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Updated: 21 November 2023, 08:02 PM IST
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