First Tata IPO In 20 Years! Much-Awaited Tata Technologies' Public Offer To Open Next Week; 10 Key Points

Tata Group will be launching its first initial public offering (IPO) in nearly 20 years. It is officially announced that the much-awaited IPO of Tata Technologies will open next week. The IPO is purely an offer for sale (OFS).

As per the regulatory filing of Tata Motors, Tata Tech's IPO will be open for subscription by the public on Wednesday, November 22, 2023, and shall close on Friday, November 24, 2023.

This will be the first IPO of Tata Group since the public offer of Tata Consultancy Services (TCS) in July 2004. TCS IPO which was launched between July 29 to August 5, 2004, oversubscribed by 5.8 times at a price band of Rs 775-Rs 900 per share. TCS was listed on August 25, 2004, at a premium of 27% against its issue price of Rs 850.

After TCS, there were no public listings since then till November 2023. Here are 10 highlights of Tata Tech IPO:

1. This IPO will be an entire offer for sale (OFS) where up to 60,850,278 equity shares will be offered by promoters and shareholders.

2. Under the OFS, Tata Motors will offload 46,275,000 equity shares, while Alpha TC Holdings Pte.Ltd will sell 9,716,853 equity shares, and up to 4,858,425 equity shares will be sold by Tata Capital Growth Fund I, each representing up to 11.41%, 2.40%, and 1.20% of the
paid-up Equity Share Capital of Tata Tech.

3. Although reserved portions for qualified institutional buyers, non-institutional investors, and retail investors are yet to be announced, 10% which is 6,085,027 equity shares of the IPO will be reserved for Tata Motors shareholders.

4. It said, that 10% of the offer for subscription by eligible shareholders of TML, i.e., Individuals and HUFs who are the public equity shareholders (including shareholders holding Ordinary Shares and 'A' Ordinary Shares in TML and excluding such persons who are not eligible to invest in the Offer under applicable laws, rules.

5. The price band of the IPO will be announced in due course.

6. Last month, Tata Motors announced to sale 9.9% stake in the IPO-bound company to TPG and Ratan Tata Endowment Foundation for a consideration of up to Rs 1,613.7 crore. Under the agreement, of the total 9.9% stake sale, Tata Motors will sell a 9% stake to TPG Rise Climate for Rs 1,467.0 crore, and the rest of 0.9% will be sold to Ratan Tata Foundation for Rs 146.7 crore.

7. Tata Tech first filed the draft prospectus with Sebi on March 9, 2023.

8. In the nine months ending December 2022, Tata Tech's revenue stood at Rs 3,011.79 crore, while the top-line stood at Rs 3,529.5 crore in FY22 and Rs 2,380.91 crore in FY21. Further, profit stood at Rs 407.46 crore as of December 2022, Rs 436.99 crore in full-year FY22 and Rs 239.17 crore in FY21.

9. Since the entire IPO is an offer for sale, the proceeds from it will be given to selling shareholders.

10. Within technology solutions (20% of revenue in FY23), the company has a product business (72% of T's revenue), including reselling software used by manufacturing companies on PLM and MES. Its education business (28% of T's revenue) focuses on reskilling corporates and government institutes, brokerage Anand Rathi earlier highlighted.

Tata Tech is a leading global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers ("OEMs") and their tier 1 suppliers. The company has deep domain expertise in the automotive industry and leverages this expertise to serve clients in adjacent industries, such as aerospace and transportation and construction heavy machinery ("TCHM").