Tata Technologies IPO, Ignites Investor Excitement as the Tata Group Returns to Public Markets After 19 Years

Tata Technologies’ initial public offering (IPO) has been approved by the Securities and Exchange Board of India (SEBI), marking the first public issue from the Tata Group in nearly two decades. The company, which had filed its IPO papers with SEBI in March, will offer up to 9.57 crore units for sale, representing 23.60% of its paid-up share capital.

This IPO is highly anticipated as it represents the first offering from the prestigious Tata Group in 19 years; the last IPO from the conglomerate was of Tata Consultancy Services (TCS) in July 2004, which has since become one of the most prominent wealth creators on Dalal Street with a market capitalization of around Rs 11.7 lakh crore.

Tata Technologies is a leading global engineering services company specializing in product development and digital solutions for global original equipment manufacturers. It was spun off as a separate entity from Tata Motors.
The IPO will see Tata Motors sell 81,133,706 shares of its subsidiary, with two other shareholders, Alpha TC Holdings and Tata Capital Growth Fund I, also offering shares in the sale.

The company’s expertise in the automotive industry extends to serving clients in adjacent sectors like aerospace, transportation, and construction heavy machinery.
Tata Technologies has financially demonstrated steady growth and profitability.

For the nine months ended December 2022, the company reported a revenue from operations of Rs 3,011.79 crore, representing a growth of 15.5% compared to the same period in 2021. Its net profit for the 9MFY23 period stood at Rs 407.47 crore, reflecting sustained profitability and an increase from Rs 331.36 crore in 9MFY22. The company’s adjusted EBITDA margins have also shown consistent improvement over the years, reaching 19.20% in 9MFY23 from 16.50% in FY20.

JM Financial Limited, Citigroup Global Markets India Private Limited, and BofA Securities India Limited are the book-running lead managers for the IPO. Although the size of the IPO has not been disclosed, market insiders estimate that it could be worth at least Rs 4,000 crore. The price band will be determined based on market demand, as assessed by the book-running lead managers during the book-building process.

The IPO allocation includes 50% reserved for qualified institutional buyers (QIBs), 35% for retail investors, and 15% for non-institutional investors. Tata Technologies has gained significant attention in the unlisted market, alongside NSE and Reliance Retail.
SEBI has also approved the IPO plans of Gandhahar Oil Refinery and SBFC Finance recently.

The Incredible Tata Technologies

Tata Technologies is a global engineering services company specializing in product development and digital solutions for original equipment manufacturers (OEMs) across various industries. It operates as a separate entity from Tata Motors, one of India’s leading automotive manufacturers, but leverages its deep domain expertise in the automotive sector to serve clients in adjacent industries such as aerospace, transportation, and heavy construction machinery.

With a rich heritage dating back to 1989, Tata Technologies has established itself as a trusted partner for companies seeking engineering and technology solutions. The company offers comprehensive services, including product design and engineering, manufacturing engineering, and enterprise solutions. It helps clients accelerate their product development lifecycle, optimize manufacturing processes, and harness digital technologies to drive innovation and improve operational efficiency.

Tata Technologies operates on a global scale, with a presence in over 30 countries and delivery centers strategically located across key markets. Its diverse workforce comprises skilled engineers, designers, and domain experts who collaborate closely with clients to understand their specific requirements and deliver tailored solutions. The company’s global footprint enables it to provide localized support and leverage its extensive network of industry partnerships.

In recent years, Tata Technologies has focused on strengthening its digital capabilities and investing in emerging technologies such as artificial intelligence (AI), machine learning (ML), and internet of things (IoT). By harnessing these technologies, the company enables its clients to leverage data-driven insights, enhance product performance, and embrace digital transformation in an increasingly connected world.

The Last Bit, Tata Technologies’ IPO not only provides an opportunity for investors to participate in the growth story of a leading engineering services company but also symbolizes the Tata Group’s return to the public markets. As the conglomerate’s first IPO in nearly two decades, it represents a milestone moment for the Tata Group and showcases its commitment to innovation, technological advancement, and creating value for its stakeholders.