Tata Technologies IPO Clocks 6.54 Times Subscription On First Day
The Tata Technologies IPO, a first from the Tata stable in nearly two decades, clocked a full subscription within the first hour.
Tata Technologies Ltd.'s initial public offering was fully subscribed within 36 minutes on the first day of opening, underscoring demand for the first public issue from the Tata Group since 2004.
The offer has been subscribed 6.54 times on its first day, according to data on the BSE Ltd. The demand was led by non-institutional investors, who put in bids 11.69 times the shares set aside. It was followed the portion reserved for shareholders that saw a subscription of 9.30 times.
Tata Motors Ltd.-promoted company that provides engineering and design services to automotive clients is expected to benefit from the sector's transition to electric and autonomous mobility. And that complements the track record and pedigree of the group that last took Tata Consultancy Services Ltd. public in 2004.
Tata Technologies raised Rs 791 crore from anchor investors ahead of its initial public offering.
The engineering services company allotted 1.58 crore shares at Rs 500 apiece to 67 anchor investors. The buyers include Fidelity International, Nippon Life India, BNP Paribas, SBI Mutual Fund, HSBC, Kotak, DSP, Motilal Oswal, Edelweiss, and Goldman Sachs, among others.
SBI Multi Asset Allocation Fund secured 4.30% of the allocation, the highest in the list.
Promoter Tata Motors Ltd. stands to gain the most from the Rs 3,000 crore IPO—a pure offer-for-sale of 6.08 crore shares from Nov. 22–24 by the promoter and investors Alpha TC Holdings Pte Ltd. and Tata Capital Growth Fund I. At the upper end of the price band of Rs 475–500 apiece, Tata Motors stands to make a profit of at least 68 times on full subscription.
Tata Technologies is the cheapest stock in the space, with a price-to-earnings ratio of 32.8–30.8 times for the fiscal ended March 31. That's at a discount to peers KPIT Technologies Ltd. (80.31 times), Tata Elxsi Ltd. (61.55 times), and L&T Technology Services Ltd. (37.47 times).
Stoxbox Investment Rationale
Expertise In The Automotive Industry
The company’s automotive domain expertise and deep understanding of its client requirements underpin the approach the company takes in helping its clients leverage digital technologies to optimize the manner in which they conceive, develop, manufacture, sell, and service new products.
Well-Recognised Brand
The company benefits from the strong track record, reputation, and experience of its promoter, Tata Motors Ltd., which is part of the Tata Group.
The Tata Group is one of the leading business conglomerates in India, with a heritage of over 100 years, comprising more than 28 equity-listed companies across multiple verticals such as technology, steel, and automotive.
