As the IPO of Tata Technologies, the first initial public offering by the Tata Group in nearly two decades, is set to open for subscription, CNBC-TV18.com lists 10 things you must know before the issue opens on Wednesday, November 22.

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1) The three-day issue, which runs till November 24, has a price band of ₹475-500 per share with a lot size of 30 equity shares and its multiples thereof. Analysts peg the post issue market cap between ₹19,269 crore and ₹20,283 crore.

2) The company's shares are trading at a premium of ₹350 in the grey market today, which is a 70% uptick over its issue price. The grey market is an unofficial platform wherein the IPO shares can be bought and sold till the listing.

3) Analysts are positive about the Tata Tech IPO considering the company's healthy business prospects, strong parentage, superior financials with improvement in margins and ratios. Prashanth Tapse of Mehta Equities recommends investors to 'Subscribe' to the IPO with long-term perspective and strong listing gains due to investor friendly pricing given good room for upside.

4) The issue, which is entirely an offer-for-sale (OFS) of 6.08 crore equity shares, aims to raise ₹3,042.51 crore via its IPO route. Since it's an OFS issue, selling shareholders will be entitled to the entire proceeds from the offer.

5) Under the OFS, parent Tata Motors will offload 4.62 crore shares, Alpha TC Holdings will sell 97.1 lakh shares and Tata Capital Growth Fund will also sell 48 lakh shares. The IPO size has been trimmed from 9.57 crore equity shares to 6.08 crore shares now.

SHAREHOLDING PATTERN

6) Tata Technologies has set aside a 10% quota for Tata Motors' eligible shareholders. As much as 50% of the issue is reserved for qualified institutional bidders, 15% for non-institutional investors, and the rest 35% for retail investors.

7) On the financial front, the company reported a turnover of ₹2,381 crore, ₹3,530 crore and ₹4,414 crore for FY21, FY22 and FY23, respectively, on a consolidated basis. It posted a net profit of ₹239 crore, ₹427 crore and ₹624 crore, respectively, for the aforementioned period.

8) Tata Tech’s growth trajectory over FY16-23 remains slower than peers’, but has seen improvement in the last three years because of traction in select accounts. Weakness in a large client in H1FY24 due to near completion of the large full-vehicle development projects may weigh on the company’s near-term performance which, is adequately captured in the IPO valuations, Emkay Global said in a note.

9) Incorporated in 1994, Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEM) and their tier 1 suppliers. Backed by Tata Motors, the company boasts extensive knowledge in the automotive sector and has expanded its expertise into aerospace and heavy construction machinery, enhancing its commercial opportunities. As of September 2023, it had 12,451 employees.

10) JM Financial, Citigroup Global Markets India, and BofA Securities India are the book-running lead managers to the IPO, while Link Intime India Private Limited is the registrar. The shares will be listed on both NSE and BSE on December 5.

First Published:Nov 21, 2023 11:24 AM IST