Tata Technologies Files For IPO; Tata Motors, Other Investors To Sell 23.6%
The Tata Technologies IPO will be a pure offer for sale by Tata Motors, Alpha TC Holdings and Tata Capital.
Tata Technologies Ltd. has sought approval of India’s market regulator for an initial public offering that will see parent Tata Motors Ltd. and others offload as much as 23.6% stake.
The Tata Technologies IPO will be a pure offer for sale of 95,708,984 shares by Tata Motors (81,133,706), Alpha TC Holdings Pte (9,716,853) and Tata Capital Growth Fund I (4,858,425), equivalent to 20%, 2.40% and 1.20% stake, respectively, according to the draft red-herring prospectus available on the website of the Securities and Exchange Board of India.
Tata Motors, at present, owns 74.69% of the company while Alpha TC Holdings and Tata Capital Growth Fund I have 7.26% and 3.63% stake, respectively.
The size of the IPO, whose proceeds will go to the selling shareholders, wasn’t disclosed. Tata Technologies' recent buyback valued the company at Rs 16,080 crore. Going by that valuation, the offer size could be at least Rs 3,800 crore.
JM Financial Ltd., BofA Securities and Citigroup Global Markets India Pvt. Ltd. are the book-running lead managers to the issue.
Tata Technologies, which largely services Tata Motors, Jaguar Land Rover and the wider Tata Group, is a global product engineering and digital services firm that helps its clients drive, fly, build and farm. The company, however, has increased the share of business generated outside. Its non-captive account contribution rose to 64% in the fiscal ended March 31, 2022, from 46% in FY20.
Tata Technologies is a strategic supplier to planemaker Airbus SA and recently inaugurated its innovation centre in Toulouse, France, as part of its strategy to cater to the product engineering and digital requirements of the global aerospace and defence sector.
Led by Chief Executive Officer Warren Harris, the firm employs more than 11,000 people across 18 delivery centres globally.
For the nine-month period ended Dec. 31, 2022, Tata Technologies had a revenue of Rs 3,052.29 crore while its net profit stood at Rs 407.46 crore. Its service segment contributed 88% of the total revenue. It has a paid-up share capital of Rs 811.83 crore and an authorised share capital of Rs 350 crore.
