Tata Tech IPO: Tata Technology, a subsidiary of Tata Motors, is likely to announce its most anticipated Initial Public Offering (IPO) soon. The leading global engineering services company has filed an addendum with the Securities and Exchange Board of India (SEBI) to its draft red herring prospectus (DRHP), this week.
According to the addendum, Tata Technologies is likely to offer 9.57 crore shares in its planned IPO with a face value of ₹2 per share.
As part of the much-awaited Tata Tech IPO, Tata Motors will sell up to 8.11 crore shares via offer for sale, Alpha TC will sell up to 9.71 crore shares, Tata Capital Growth Fund I will offer up to 48.58 lakh shares, according to Mint.
The company has also announced that 10% of the shares offered in Tata Tech IPO will be reserved for its employees as well as shareholders of parent Tata Motors Ltd, reported Mint.
“Employees eligible to buy shares in Tata Tech IPO can apply in the Employee Reservation Portion. They can apply at the cut-off Price. The maximum bid amount under the TML shareholders reservation portion by an eligible TML Shareholder shall not exceed ₹2 lakh. On the other hand, the maximum bid amount under the employee reservation portion by an eligible employee should be under ₹5 lakh,” the addendum said.
The company has also appointed financial institutions like JM Financials, Citi, and BoFA Securities to facilitate the IPO process.
Tata Tech IPO: What experts are saying
Mohit Gulati, CIO & Managing Partner of ITI Growth Opportunities Fund, told Mint that the Tata Tech IPO is a significant step for the Tata Group to reduce its debt.
He also pointed out that a price per share could reasonably be around ₹280 to ₹320.
“ ₹18k to ₹20k-crore market-cap will be fair in my opinion. Euphoria can probably take it to 30-35k. Anything above that is a sure stretch,” Gulati said.
Vinit Bolinjkar, Head of Research, Ventura Securities, told Mint that companies in the Engineering Research and development (ER&D) industry are likely to exhibit superior business prospects in comparison to traditional IT firms.
He pointed out these companies have an enhanced growth potential both within India and abroad, adding that this is a result of sustained investments in new product development and process optimization.
“Tata Tech, as a progressive player in the global ER&D sector, stands poised for robust growth. We are confident that Tata Tech will meet investors’ expectations, especially considering the current buzz in the primary market this year,” added Bolinjkar.