The Tata Technologies IPO has emerged as a standout player in the current IPO season, promising not only size but also substantial potential. The highly-awaited Tata Technologies IPO closed on Friday evening with a record high 70x bids worth ₹1.56 lakh crore, surpassing the country’s biggest IPOs. It was a special time for investors after 19 years who get to see another such massive offering by TATA.
As a pivotal player in the global engineering services sector, Tata Technologies, a subsidiary of Tata Motors Limited, provides a range of services across industries such as Automotive, Aerospace, Industrial machinery, and Consumer goods. Over the past few days, lots of big things have happened in the financial market.
In this article, we delve deeper into nine key aspects about TATA Technologies IPO, shedding light on the intricacies of this significant financial move.
#1 Record-breaking Subscription:
Since its Launch on November 22, 2023, the Tata Technologies IPO has witnessed an unprecedented response, garnering a subscription status of 15.1 times at the end of Day 2. With a staggering 51 lakh applications in the first two days, it now holds the record for the most subscribed IPO by a private company.
Boasting an impressive number of applications, the Tata Technologies IPO has outperformed companies like Nykaa, Reliance Power, and Zomato. Moreover, esteemed entities such as SBI Securities and Swastika have endorsed the IPO with a ‘subscribe’ tag, affirming its attractiveness and potential benefits for a wide spectrum of investors.
Here’s a close-up of the overall story of the Tata Technologies IPO so far –
| IPO Date | November 22, 2023 to November 24, 2023 |
| Listing Date | 05 December 2023 |
| Face Value | ₹2 per share |
| Price Band | ₹475 to ₹500 per share |
| Lot Size | 30 Shares |
| Total Issue Size | 60,850,278 shares (aggregating up to ₹3,042.51 Cr) |
| Offer for Sale | 60,850,278 shares of ₹2 (aggregating up to ₹3,042.51 Cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Shareholding pre issue | 40,56,68,530 |
| Shareholding post issue | 40,56,68,530 |
#2 Diverse Service Spectrum:
Tata Technologies offers a comprehensive suite of services, encompassing engineering and design, product lifecycle management, manufacturing, product development, IT service management, digital solutions, and digital transformation services.
This diverse portfolio positions the company as a holistic solution provider, making it adaptive to the future requirements of the industry, driving popularity to TATA Technologies IPO too.
#3 Parentage of Tata Technologies IPO:
Operating as a subsidiary of Tata Motors Limited, Tata Technologies benefits from a robust corporate backing. TATA Motors itself is a global giant in automobiles manufacturing.
With Total assets of ₹336,081.38 crore (US$42 billion) (2023), Tata Motors is India’s largest automobile company by revenue. The incorporation in 1994 further underscores the longstanding presence of the TATA Technologies IPO in the market.
#4 Industry Focus:
The company’s services cater to various industries, demonstrating a strategic focus on Automotive, Aerospace, Industrial machinery, and Consumer goods. This sectoral emphasis aligns with the broader market trends and indicates a specialized approach of the TATA Technologies.
The uniqueness of the Tata Technologies IPO lies in its strategic positioning as a provider of product development and digital solutions to global original equipment manufacturers (OEMs) and their tier-1 suppliers.
Unlike conventional offerings, Tata Technologies goes beyond generic services, providing comprehensive turnkey solutions tailored for the specific needs of these manufacturers.
#5 Financial Performance:
The financial performance of Tata Technologies showcases a robust trajectory. Reporting a remarkable 42.8% YoY growth in consolidated net profit (Rs 624 crores) for the year ended March 2023, the company also achieved a noteworthy 25.81% increase in revenue.
Here is a brief break-up of the Financials of Tata Technologies (in Rs crores)-
| Financial Year | Total Assets | Total Revenue | Profit After Tax | EPS |
| 31 March, 2020 | 2,572.97 | 2,896.96 | 251.57 | 6.20 |
| 31 March, 2021 | 3,572.74 | 2,425.74 | 239.17 | 5.89 |
| 31 March, 2022 | 4,218.00 | 3,578.38 | 436.99 | 10.77 |
| 31 March, 2023 | 5,201.49 | 4,501.93 | 624.04 | 15.38 |
#6 IPO Pricing Dynamics:
The IPO is priced in the range of ₹475 to ₹500 per equity share with a face value of ₹2. The pricing strategy reflects a careful balance, which not only aims to attract a diverse range of investors but also signifies the company’s confidence in its valuation.
The three-day bidding process, scheduled to conclude on November 24, adds a sense of urgency and anticipation to the IPO. The limited time frame underscores the significant demand and investor interest, contributing to the overall uniqueness of the Tata Technologies IPO in the current financial landscape.
#7 Promoter Stake Dynamics:
Tata Motors, along with its finance arm, Tata Motors Finance Ltd, forms the prominent promoter group of Tata Technologies Ltd. Currently holding a substantial 66.79% stake, this stake will undergo dilution to 51.79% post the IPO.
The IPO’s distinctiveness is further underscored by its allocation strategy, with 50% reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors, and 15% for High Net Worth Individuals (HNI) / Non-Institutional Investors (NII).
Such a diversified allocation approach aims to cater to different investor categories, fostering a broad-based participation. Additionally, the stock’s dual listing on the NSE and BSE enhances its accessibility to a wide spectrum of investors, adding an extra layer of appeal and market reach.
This comprehensive structure reflects a thoughtful and inclusive approach to the IPO, distinguishing it in the financial landscape.
#8 Historical Significance:
Notably, the Tata Technologies IPO marks a pivotal moment for the Tata Group, breaking a 19-year hiatus since the last IPO in 2004 (TCS). This historical context adds an intriguing layer to the current financial event.
Some Important Dates of Tata Technologies IPO are as follows –
| IPO Open Date | Wednesday, November 22, 2023 |
| IPO Close Date | Friday, November 24, 2023 |
| Basis of Allotment | Thursday, November 30, 2023 |
| Initiation of Refunds | Friday, December 1, 2023 |
| Credit of Shares to Demat | Monday, December 4, 2023 |
| Listing Date | Tuesday, December 5, 2023 |
| Cut-off time for UPI mandate confirmation | 5 PM on November 24, 202 |
Conclusion:
In navigating the Tata Technologies IPO landscape, these nine insights offer a nuanced understanding of the company’s offerings, market positioning, and historical significance. Prospective investors and enthusiasts alike can leverage these details for a more informed perspective on this landmark financial event.
