Mega IPO: Tata Tech IPO Price Band Fixed, To Raise Rs 3,042.51 Crore; Latest GMP Hints At 70% Premium Listing

Much-awaited mega initial public offering (IPO) of Tata Technologies is set to hit the primary market next week, and even before the launch, this IPO has witnessed a huge demand in the grey market. In the latest development, Tata fixed price bands for the IPO, and is expected to raise up to Rs 3,042.51 crore. However, the latest GMP suggests a strong over 70% premium listing.

Tata Technologies is the global engineering and product development digital services company of Tata Group and it has proposed an IPO of up to 60,850,278 equity shares.

The IPO is entirely offered for sale (OFS). Of the total IPO size, 46,275,000 equity shares will be offloaded by Tata Motors, 9,716,853 shares by Alpha TC Holdings, and 4,858,425 equity shares by Tata Capital Growth Fund I.

Also, from the total IPO size, 50% of the shares will be reserved for qualified institutional buyers (QIBs), while 15% to be kept for non-institutional investors, and 35% to be allocated to retail individual investors (RIIs).

There is also 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.

On November 16, in a press conference, Tata Tech fixed the price band for the IPO at the lower range of Rs 475 to Rs 500. On the price band, the IPO size comes to around Rs 2,890-3,042 crore.

As per the InvestorGain website, Tata Technologies IPO's last GMP is ₹351, last updated Nov 17th 2023 07:25 PM. With a price band of Rs 500, Tata Technologies IPO's estimated listing price is ₹851 (cap price + today's GMP). The expected percentage gain/loss per share is 70.20%.

In general terms, Nirmal Bang on its website explains grey market premium (GMP). As per the brokerage, GMP is a premium amount at which grey market IPO shares are traded before they get listed on the stock exchange. In simple words, the stock of the company that came up with the IPO is bought and sold outside the stock market.

It added the GPM reflects how the IPO might react on a listing day.

Tata Technologies IPO will be the first in 20 years. The last time Tata Group launched an IPO was of their flagship giant Tata Consultancy Services (TCS) which went public in 2004.

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

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.