Tata Group’s engineering services company Tata Technologies has raised ₹791 crore from 67 investors through an anchor book on Tuesday, November 21, a day before its initial public offering (IPO) opens for bidding. The funds were collected at the upper limit of the ₹475-500 price range.
Tata Technologies IPO, which will be the first public offering of the Tata Group company in nearly 20 years, will open for bidding on November 22 and close on November 24.
“Tata Technologies in consultation with the book-keeping senior managers finalized allotment of 1,58,21,071 equity shares to anchor investors, at a price of ₹500 per share,” the company said in its filing to exchanges.
The company of the Tata group repaired Tata Technologies IPO price band at ₹475 to ₹500 for stock levels. Tata Technologies Ltd aims to raise ₹3,042.51 crore from this initial offer, which is entirely an offer for sale (OFS) in nature.
The company has set aside 20.28 lakh shares for its employees and 60.85 lakh for Tata Motors shareholders. The net issue of the IPO, excluding the portions allocated to employees and shareholders, constitutes the total offer.
Fifty percent of the total offer size was allocated to qualified institutional buyers, while 15 percent is intended for high net worth individuals. The remaining 35 percent is reserved for retail investors.
According to market analysts, Tata Technologies IPO shares were trading at a significant 70 percent premium in the gray market over the upper price band. The gray market acts as an informal platform for trading IPO stocks until their official listing.
According to market observers, Tata Technologies IPO gray market premium (GMP) today is ₹351, which is unchanged from yesterday’s GMP of ₹351. This means that Tata Technologies IPO GMP remained stable despite choppy trends on Dalal Street.
Tata Technologies IPO allotment date is most likely November 27, 2023, while most likely Tata Technologies IPO listing date is November 29, 2023.
Arihant Capital recommended ‘apply’ tag to the public offering citing, “Tata Technologies Limited provides a diverse range of services spanning IT consultancy, SAP implementation, and CAD/CAM engineering and design consultancy. The revenue breakdown in FY23 indicates approximately 80% of services, 11% of products, and 9% of education. Strong partnerships, including with Dassault and Siemens, and leveraging Microsoft AZURE products enables global expansion. Recent empanelment of Airbus signals significant growth potential. The company’s revenue and PAT showed a CAGR of 36% and 62%, respectively, from FY21 to FY23. In H1FY24, there was 34% and 36% YoY growth in revenue and PAT. Robust earnings growth is anticipated going forward. Tata Technologies has outperformed Tata ElxsiL&T Technologies, and KPIT Technologies in revenue CAGR over the last three years. At an upper band rating of ₹500, the issue valued at PE ratio is 32.5x based on FY23 EPS. We recommend subscribing to the issue for both short-term listed gains as well as long-term investment prospects.”
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Updated: 21 Nov 2023, 20:02 IST