Tata Technologies Sets IPO Price Band At Rs 475-500 To Raise More Than Rs 3,000 Crore
A price band of Rs 475-500 per share ascribes Tata Technologies a post-IPO market capitalisation of up to Rs 20,000 crore.
Tata Technologies Ltd. has set the price band for its Rs 3,000-crore initial public offering, ascribing it a post-offering market capitalisation in excess of Rs 20,000 crore.
The Nov. 22-24 IPO, a first from the Tata stable in nearly two decades, is a pure offer-for-sale of 60,850,278 shares at Rs 475-500 apiece, according to a company notice on Thursday. Parent Tata Motors Ltd. (46,275,000), and investors Alpha TC Holdings Pte Ltd. (9,716,853) and Tata Capital Growth Fund I (4,858,425 ) are offloading stock equivalent to 11.41%, 2.40% and 1.20% stake, respectively.
A portion of the offering, about 10%, is reserved for the employees of Tata Technologies and shareholders of Tata Motors. While qualified institutional buyers can bid for 50% of the net offer, 15% of the Rs 3,000-crore IPO is reserved for non-institutional investors. The rest, about 35%, is for retail investors.
At the upper end of the price band, the ER&D company will end up raising a little over Rs 3,000 crore at a post-issue implied market cap in excess of Rs 20,000 crore.
The bid lot size is set at 30 shares and multiples there of.
JM Financial Ltd., Citigroup Global Markets India Pvt. and BofA Securities India Ltd. are the book-running lead managers for the issue.
Smaller Than Planned
To be sure, Tata Technlogies shareholders are offloading less stock than previously planned.
In the draft red-herring prospectus filed with the Securities and Exchange Board of India in March this year, the Pune-based ER&D services firm said Tata Motors, Alpha TC Holdings and Tata Capital Growth Fund I would offload a total of 95,708,984 shares equivalent to 20%, 2.40% and 1.20% stake, respectively.
The reduction is due to the fact that Tata Motors has sold 9.9% of its stake in Tata Tech to new investors at an enterprise valuation of Rs 16,300 crore, or about $2 billion, ahead of the IPO. TPG Rise Climate SF Pte, a climate-focused private equity fund which had previously invested $1 billion in Tata Motors’ electric mobility unit, has bought 9% stake in Tata Technologies while Ratan Tata Endowment Foundation picked up the rest.
The transaction happened at Rs 401.81 per equity share, according to the company's red herring prospectus.
The move is part of Tata Motors’ “deleveraging agenda”, the company said on Oct. 13 while announcing the stake sale. As on Sept. 30, the company’s net automotive debt reduced to Rs 38,700 crore as against Rs 41,700 crore in the previous quarter.
Tata Motors wants its domestic business to be net debt-free by FY24.
Tata Technologies, a wholly owned subsidiary of Tata Motors, is a global ER&D services firm that offers product development and digital solutions to original equipment manufacturers, not limited to the automotive sector. It counts Jaguar Land Rover Plc and Airbus SE among its clientele. JLR recently expanded its partnership with Tata Technologies for its digital transformation.
