MUMBAI: The Securities and Exchange Board of India (Sebi) has approved Tata Technologies Ltd’s, a subsidiary of Tata Motors, initial public offering (IPO), making it the first public issue from the Tata Group in nearly 20 years.
The last IPO from the Tata Group was that of Tata Consultancy Services (TCS) in July 2004. Tata Technologies had filed draft papers with Sebi earlier this year in March. The IPO will be purely an offer for sale (OFS), with Tata Technologies selling nearly 23.6 per cent of its paid-up share capital, equivalent to 9.57 crore equity shares.
The size of the IPO has not been disclosed yet and the price band will be decided in consultation with the book-running lead managers taking note of market demand for the equity shares. As per the draft papers, Tata Technologies’ IPO is purely an Offer For Sale (OFS), where the company will sell up to 9.57 crore equity shares representing approximately 23.6 per cent of its paid-up share capital.
About 50 per cent of the offer is reserved for qualified institutional buyers (QIBs), 35 per cent of the issue is reserved for retail investors and 15 per cent for non-institutional investors.
Under the OFS, Tata Technologies’ parent company Tata Motors will offload 8.11 crore shares or a 20 per cent stake in the company. Among other shareholders, Alpha TC Holdings plans to sell up to 97.16 lakh shares (2.4 per cent) and Tata Capital Growth Fund I would offload up to 48.58 lakh equity shares (1.2 per cent). Tata Motors holds a 74.69 per cent stake in the firm, while Alpha TC Holdings Pte has a 7.26 per cent stake. Tata Capital Growth Fund I has a 3.63 per cent stake in the company.
JM Financial Limited, Citigroup Global Markets India Private Limited, and BofA Securities India Limited are the Book Running Lead Managers for the IPO. Tata Technologies is a pure-play engineering services firm that provides product development and digital engineering solutions focused on manufacturing-led verticals.
Originally incorporated as Core Software Systems in 1994, it was acquired by the Tata Group and later renamed to Tata Technologies in Feb 2001. For the nine months ended December 2022, the firm reported revenue from operations of Rs 3,011.79 crore as against Rs 2607.30 crore for the nine months ended December 2021, representing a growth of 15.5 per cent. The market regulator has also approved the IPO plans of Gandhahar Oil Refinery and SBFC Finance.
IPO size not disclosed yet, price band to be decided
The size of the IPO has not been disclosed yet and the price band will be decided in consultation with the book-running lead managers taking note of market demand for the equity shares. As per draft papers, the IPO is purely an offer for sale (OFS)