Tata Technologies sets IPO band at Rs475-500 a share

Tata Technologies, which is coming out with an initial public offer (IPO), has announced a price band of Rs475-500 per share for the offer-for-sale (OFS).

Three major shareholders of Tata Technologies – Tata motors, Alpha TC Holdings and Tata Capital Growth Fund will sell a total of 60.71 million equity shares with a face value of Rs2 each.

The three shareholders of Tata Technologies are expected to raise about Rs2883.28 crore at the lower end and Rs3,035 crore at the upper end, respectively, of the price band.

The lot size has been fixed at 30 equity shares and multiples thereof while the subscription will remain open from 22 November to 24 November.

Under the OFS, parent Tata Motors will offload 46.2 million shares, Alpha TC Holdings will sell 9.71 million shares and Tata Capital Growth Fund will sell 4.8 million shares.

Since it is an OFS by shareholders, the entire proceeds will go to the sellers and the company will not receive any IPO proceeds.

Tata Technologies has reserved 10 per cent of the shares being sold in the OFS to eligible shareholders of Tata Motors. About 50 per cent of the issue will be sold to qualified institutional bidders, while retail investors and non-institutional investors will be offered  35 per cent and 15 per cent, respectively, of the issue.

Tata Technologies, a global engineering services company, has reportedly been in talks with Morgan Stanley, Blackrock, and some other US hedge funds to invest in its public offer at a valuation of $2.5 billion.

The company has more than 9,300 employees and offers product development and digital solutions, including turnkey solutions to global original equipment manufacturers (OEMs) and their tier-I suppliers. It has also group companies, JLR and Tata Motors, as captive clients. 

The company reported a 46 per cent revenue growth in the 2022 financial year.

For the first nine months of the current financial year, the company's revenue and net profit saw double-digit growth while its operating margin has increased by nearly 300 basis points to 19.2 per cent.

Shares of Tata Technologies in the unlisted market are reported to be in high demand while the grey market premium has shot up to Rs298.