Tata Technologies IPO to open on 22 November

Tata Technologies Ltd has come out with an initial public offer of shares in which shareholders of the company will sell a little over 15 per cent of the shares of the company. The price band of the IPO is yet to be arrived at.

Tata Technologies had, last month, announced the sale of a 9.9 per cent stake to TPG Rise Climate for Rs1,613.7 crore, which gives the company an equity valuation of Rs16,300 crore.

The IPO, which is an offer for sale (OFS), will open for subscription on 22 November and close on 24 November, its parent company Tata Motors Ltd. stated in a stock market filing.

Tata Motors, which holds over 74 per cent stake in Tata Technologies, will be selling 11.41 per cent stake, comprising 46.2 million shares in the company. Other shareholders - Alpha TC Holdings Pte Ltd and Tata Capital Growth Fund I - will offload 2.4 per cent and 1.2 per cent stake, respectively

Tata Technologies will not receive any funds from the stake sale as this is a mere offloading of shares by existing shareholders as the IPO will only result in a restructuring of shareholding. 

Incidentally, 10 per cent of the IPO is reserved for shareholders of Tata Motors, including individuals and Hindu Undivided Families (HUF).

As per the draft red herring prospectus, Tata Motors has pruned the number of shares it planned to offload to almost half of the 81 million shares it initially planned to sell.

Tata Motors had acquired its 74.42 per cent stake in Tata Technologies at Rs7.4 per share while Alpha TC Holdings and Tata Capital Growth Fund acquired their stakes at Rs25.1 per share.

The IPO by a Tata Group company comes nearly  20 years after the initial public offer of Tata Consultancy Services (TCS).

Tata Technologies, a major engineering services company, offers product development and digital solutions, including turnkey solutions to global OEMs and their tier-I suppliers. The company also caters to industries like aerospace, transportation, construction and heavy machinery.

The company, which employs over 9,300 people globally, reported 46 per cent revenue growth in the 2022 financial year