Tata Group Makes Historic Move with Highly Anticipated IPO

The Tata Group has launched its first Initial Public Offering (IPO) in nearly two decades, with Tata Technologies making its debut on Dalal Street for subscription on November 22, 2023. Tata Technologies, a global engineering services company, has been fully subscribed within minutes of opening for subscription. The IPO is an offer-for-sale (OFS) of 6.08 crore equity shares, with Tata Motors offloading a significant portion of their stakes.

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The offering has received subscriptions 6.54 times over, with investors purchasing 29.43 crore shares, far exceeding the offer size of 4.5 crore. Data from the exchanges show that retail investors exceeded their share quota by 5.42 times, while high-networth individuals (HNIs) oversubscribed by 11.69 times. Qualified institutional buyers (QIB) demonstrated strong interest, with bids coming in 4.08 times over their allocated quota. As for the portion reserved for Tata Technologies' employees, it was oversubscribed by 1.1 times, while Tata Motors' shareholders subscribed 9.3 times over their allotment.

The primary objective of the IPO is to achieve the benefits of listing the equity shares on the stock exchanges and provide an opportunity for selling shareholders to exit the company. This move is expected to raise a total of Rs 3,042.51 crore, helping to boost the company's net profit, which stood at Rs 351.90 crore for the six months ended September 30, 2023.

The shares of Tata Technologies will be listed on BSE and NSE. The price band of the IPO is set at Rs 475-500 per share and is anticipated to list at a premium of 65-70% in the stock exchanges. The company has reserved shares for eligible employees, shareholders of Tata Motors, qualified institutions, retailers, and non-institutional investors.

 

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This IPO is expected to have a significant impact on the Tata Group, with shares of Tata Investment Corporation surging by 14% to a 52-week high following the value-unlocking exercise in its subsidiary Tata Technologies. This move has doubled investors' money in 2023, reflecting the strong financial growth and expertise of the company in the automotive industry.

In conclusion, the Tata Technologies IPO is a landmark event for the Tata Group, marking its return to the IPO market after almost two decades. It also firmly establishes Tata Technologies as one of the leading players in the global engineering services industry.

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