Tata Technologies IPO Subscribed 6.54 Times On Day One
The IPO has been subscribed 6.54 times, as of 5 p.m. on Wednesday.
The timing of the Tata Technologies Ltd.'s initial public offering, the first from Bombay House since Tata Consultancy Services Ltd. went public in 2004, was subscribed within 36 minutes of opening. The timing couldn’t have been more apt.
Global spending on ER&D—the segment Tata Technologies operates in—is set to grow at a compounded annual growth rate of 10% over the next five years to $2.7 trillion, according to a Zinnov report. The automotive sector, which is the largest manufacturing ER&D vertical, is primed for a once-in-century disruption — courtesy the advent of Connected, Autonomous, Shared and Electrified (CASE) mobility. Global automakers, according to Zinnov, are likely to spend $1.2 trillion through 2030.
Tata Technologies Ltd. has raised Rs 791 crore from anchor investors ahead of its initial public offering.
The engineering services company allotted 1.58 crore shares at Rs 500 apiece to 67 anchor investors.
The marquee investors include Fidelity International, Nippon Life India, BNP Paribas, SBI Mutual Fund, HSBC, Kotak, DSP, Motilal Oswal, Edelweiss, and Goldman Sachs, among others.
SBI Multi Asset Allocation Fund secured 4.30% of the allocation, the highest in the list.
IPO Details
Issue opens: Nov. 22.
Issue closes: Nov. 24.
Fresh Issue: Not applicable.
Offer For Sale: 60,850,278 shares.
Total Issue Size: Rs 3,042 crore.
Price Band: Rs 475–500 per share.
Face Value: Rs 2 per share.
Lot size: 30 shares and multiples thereof.
Listing On: BSE and NSE.
The company will undertake a pre-IPO placement on Nov. 21.
Business Model
Founded in 1994, Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to original equipment manufacturers and their Tier-I suppliers. The company is primarily focused on the automotive industry and is currently engaged with seven out of the top 10 automotive ER&D spenders and five of the top 10 prominent new energy ER&D spenders.
The company operates two lines of business:
1. Services: The company provides outsourced engineering services and digital transformation services to global manufacturing clients to help them conceive, design, develop and deliver better products. The services line contributed Rs 3,531 crore and Rs 1,986 crore to revenue from operations in FY23 and H1 FY24, respectively. That’s 80% and 78.62% of the top line for the respective periods.
2. Technology solutions: This business is two-pronged.
Through its products business, Tata Technologies sells third-party software applications, primarily product lifecycle management software and solutions. It also provides value-added services such as consulting, implementation, system integration and support.
Through its education business, it provides “phygital” education solutions in manufacturing skills, including upskilling and reskilling public and private sector employees in the latest engineering and manufacturing technologies through its iGetIT platform.
The technology solutions segment contributed Rs 883 crore and Rs 540.3 crore to the company’s revenue from operations in FY23 and H1 FY24.
Subscription Status: Day 1
The IPO has been subscribed 6.54 times, as of 5 p.m. on Wednesday.
Institutional investors: 4.08 times
Non-institutional investors: 11.69 times
Retail investors: 5.42 times
Employee Reserved: 1.10 times
Reservation Portion Shareholder: 9.30 times
