Mumbai: The Tata group on Thursday launched the initial public offering (IPO) of Tata Technologies, the first from the group’s stable after Tata Consultancy Services Ltd went public in 2004.
A successful Tata Technologies IPO may prompt the conglomerate to take more group companies public, two investment bankers said on condition of anonymity.
Both Tata Sons and Tata Capital were classified by the Reserve Bank of India (RBI) in September 2022 as “upper tier” NBFCs, which requires them to go public three years from the date of classification. Tata Capital managing director Rajiv Sabharwal said the company will comply with the RBI categorization, a Mint report said in September. The company is considering an IPO in 2025, the report said.
In November 2022, several news reports said Tata Play had made a confidential filing for an IPO, although the company has now abandoned it after firming up plans to buy back investor Temasek’s stake in the entity. Tata Projects is seen as another future listing candidate and may reverse listing through a listed Tata Group unit, a senior executive previously said.
On Thursday, Tata Technologies MD and CEO Warren Harris hinted at the return of the Tata group to the public markets after two decades. “I feel the weight of responsibility, not only for Tata Technologies, but also for the group. The group has positioned its reputation and supported our decision to list. We have some very big shoes to fill, given what TCS has been able to do in the last 19 years. And we were fully aware of what that meant,” Harris said, declining to comment on other group companies.
“I have no doubt that if we can succeed, it will be the catalyst for other group companies to explore the value that can be achieved through this. But I am responsible for Tata Technologies. I am not responsible for the other companies that may be looking at it (IPO),” he said on the sidelines of the company’s IPO launch on Thursday.
Under Tata Sons chairman N. Chandrasekaran, the Tata group has made major acquisitions, including national carrier Air India, telecom gear maker Tejas networks and online grocer Big Basket.
In the Tata Technologies IPO, parent Tata Motors, Tata Capital and Mizhou are offloading shares in total. ₹3,042 crores. The Pune-based engineering firm has set the price band for its IPO, which consists of only an offer for sale to existing investors and promoters, at ₹475-500. The company is not looking to raise fresh capital.
In October, in a pre-IPO intervention, Tata Motors sold 36.5 million equity shares to TPG Rise Climate SF, a climate technology-focused fund of TPG group at ₹401.81 fee for ₹1,467 crore, valuing the company at $2 billion. This is almost 24% lower than the upper price band of ₹500 share.
According to the prospectus filed with market regulator Sebi, promoter Tata Motors will sell 46.2 million equity shares. ₹2,313.75 crore in the OFS and investors Mizuho Bank through its arm Alpha TC Holdings Pte Ltd will sell 971.7 million shares worth ₹485.84 crores. Tata Capital, the investment arm of the group will sell 485.8 million shares held through Tata Capital Growth Fund I to clear. ₹242.92 crores. The issue will open on November 22nd and close on November 24th.
The anchor book will open on 21 November. Demand for the IPO is robust, the leading bookmakers said. JM Financial, Citibank and Bank of America Merrill Lynch are the managers of the issue.
The company saw its revenues grow 25% to ₹4,414 crore for the period ending March 31, 2023 over the previous year. Its profit after tax grew 42.8% to ₹624 crore for FY23. For the first half ended September 30, 2023, the company recorded revenue of ₹2,526.7 crore and its profit stood at ₹351.9 crores.
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Updated: 16 Nov 2023, 23:31 IST
(tagsTo Translate)Tata Technologies