Tata Technologies IPO: When to expect and what its unlisted price is indicating?

The initial share sale of Tata Technologies is one of the most awaited ones on Dalal Street and analysts are expecting the company to hit the markets in five to six months.

Ruling out the possibility of any regulatory hurdle regarding the IPO, analysts expect the approval from regulator SEBI anytime soon.

In the unlisted market, the shares are trading around Rs 850 levels and since the pricing is not yet known, there have been supply side constraints.

"There have been instances of bulk buying around Rs 750 levels and at one point, the shares have hit a peak of Rs 900. The stock is expected to list at a premium of 20-30%," said Manish Khanna, Co-Founder at Unlisted Assets.

Tata Technologies is a global product engineering and digital services company and a unit of Tata Motors. The auto major currently holds a 74.69% stake in the company.

The company offers product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs). It has a workforce of over 11,000 employees spread across 18 global delivery centres.

Tata Tech has filed IPO papers with SEBI in March and is awaiting regulatory approval on the same.

The issue is completely an offer for sale (OFS), under which the selling shareholders will offload up to 9.57 crore units representing 23.60% of its paid-up share capital.

Under the OFS, Tata Technologies' parent company Tata Motors will offload 8.11 crore shares or a 20% stake in the company. Among other shareholders, Alpha TC Holdings Pte plans to sell up to 97.16 lakh shares (2.40%) and Tata Capital Growth Fund I would offload up to 48.58 lakh equity shares (1.20%).

The size of the IPO hasn’t been disclosed yet. However, according to Krishna Raghavan, Founder, UnlistedKart, a SEBI-registered research analyst firm, Tata Technologies' recent buyback valued the company at Rs 16,080 crore, indicating that the offer size could be at least Rs 3,800 – Rs 4,000 crore.

For the nine-month period ended December 2022, the company clocked 15% year-on-year growth in revenue at Rs 3,052 crore. The services segment revenue contributed 88% of the total revenue. The company's net profit during the same period stood at Rs 407 crore.

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