The Indian stock market investors have been quite occupied for the last few days. While a slew of Initial Public Offerings (IPOs) has been launched into the market, Nifty and Sensex are soaring at record highs. Amid all these, the Securities and Exchange Board of India (SEBI) has given a green signal to Tata Technologies IPO, which would be the first Tata Group IPO in almost two decades.
As you eagerly wait for this IPO to open for public investors, several Tata Group shares have already gained momentum. But before you invest your hard-earned money in this IPO, below are a few details you must know.
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Tata Technologies offers engineering services and Information Technology (IT) solutions to clients across the globe. The company boasts deep expertise and domain knowledge in the automotive industry and adjacent sectors such as aviation, transportation, and heavy machinery construction. The company is a subsidiary of Tata Motors and belongs to the prestigious Tata Group.
Tata Technologies would be the first Tata Group IPO in 19 years, the last being Tata Consultancy Services IPO in 2004. The company was originally incorporated as “Core Software Systems” in 1994 but was later acquired by the Tata Group and renamed “Tata Technologies” in 2001.
The strengths of the company include:
Some risk factors or weaknesses associated with Tata Technologies include:
The company’s ability to tap into the emerging EV market has worked in its favour. The revenues have grown strongly from Rs. 2,381 crores to Rs. 3,530 crores in one year between FY 2021 and FY 2022. The company’s net profit also increased tremendously from Rs. 239 crores to Rs. 437 crores in the same period.
While the liabilities of the company have grown from Rs. 453 crores in FY 2020 to Rs. 1,696 crores in FY 2022, the value of the total assets has also soared. Have a look at the table below to understand Tata Technologies’ financials:
|Particulars||As of and For FY Ending March 31|
|Revenue from Operations||2,852||2,381||3,530|
|Equity Per Share||6.2||5.89||10.77|
*Amount in Crores
The Tata Group filed the preliminary papers for Tata Technologies IPO in March 2023 and got the nod in July. The issue will be a complete offer for sale (OFS) with shareholdings offloading up to 9.57 crore units that represent 23.60% of the company’s paid-up share capital. Although the issue size of the IPO is yet to be disclosed, it is estimated to be worth at least Rs. 4,000 crores.
About 50% of the offer will be reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors. Other details, such as IPO opening and closing dates, lot size, allotment finalization, and listing date are not yet declared by the company. However, the IPO is expected to hit the stock markets in mid-July 2023.
The current market conditions and the rich history of the Tata Group root strongly for the subscription of Tata Technologies IPO. Its ability to cater to its global clients and tap into the emerging EV market means that the company is poised for growth in the future. No wonder this is one of the most awaited IPOs of 2023.
But before investing your hard-earned money in an IPO, you must take cognisance of the company’s business verticals, financials, promoters, and other details. If you need a Demat account to invest in IPOs, you can open it for free with Motilal Oswal.
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