NEW DELHI: Tata Technologies, the first initial public offering (IPO) by the Tata Group in 20 years, is attracting a very high premium in the unofficial grey market, indicating a blockbuster listing on the stock exchanges.
According to iPOWatch, shares of Tata Technologies were available at Rs 850 apiece in the grey market, which is 70%, or Rs 350, premium over the upper price band of Rs 500 per share. The high demand for Tata’s latest share comes even as four other companies are also launching their IPOs this week.
They are - Gandhar Oil Refinery, Flair Writing, IREDA and Fedbank Financial Services. Last checked, shares of these companies were commanding a premium of 6-30% in the grey market. Adding to the euphoria, the latest IPO of the salt to airline conglomerate has also received a thumbs up rating from brokerages.
Prashanth Tapse, research analyst at Mehta Equities, said they like the company’s strong established brand and diverse product portfolio across different product categories from traditional OEMs to new-age energy vehicles like EVs. “We think outsourcing business model would be in great demand going forward in engineering services and digital transformation services to global manufacturing clients helping clients to conceive, design, develop and deliver better products. By looking at the financials historically, Tata Tech has delivered a strong revenue and margin growth in the last 3 years and expect the growth would remain similar going forward,” said Tapse.
He added, “On valuation per se at upper price band of Rs 500 and based on annualised earnings and fully diluted post-IPO paid-up capital, the issue is asking for a market cap of Rs 20,283 crore with P/E of 29x on consolidated basis, which seems the issue is reasonably priced when compared industry peers which are trading 60x.” Tata Tech has proposed to open its IPO of up to 60,850,278 equity shares on Wednesday, November 22, 2023. Bid/offer closing date will be Friday, November 24, 2023.
