On Saturday evening, Tata Motors made an announcement. They disclosed that Tata Technologies, their subsidiary, has established the offer price for its IPO at ₹500 per equity share. This includes the anchor investor offer price.
The Company valued the Initial Public Offering (IPO) at ₹3,042.5 crore. It received an impressive subscription of 69.43 times on the final day, mainly fueled by active participation from institutional buyers. This offering specifically focuses on digital services in engineering and product development.
On Tuesday, the Tata Group firm secured Rs 791 crore from anchor investors in a pre-IPO placement.
Moreover, the Tata Technologies IPO attracted the highest number of applications for an Indian IPO, totaling 73.58 lakh. It also surpasses Life Insurance Corp. of India, according to Nuvama’s Finworld app. The total bid value reached Rs 1.56 lakh crore at the last count.
Considering the upper end of the price band, Tata Motors could attain a 68-times return on investment. They had acquired a controlling stake in Tata Technologies at Rs 7.41 per share in 1996.
Tata Technologies Sets Share Price at ₹500
On Saturday night, Tata Motors announced that Tata Technologies, its subsidiary, has finalized the IPO offer price. They set the price, including the anchor investor offer, at ₹500 per share.
Tata Motors confirmed that Tata Technologies Ltd has set the offer price at ₹500 per share, including the anchor investor’s price. They consulted with the book running lead managers to the IPO to accomplish this. Moreover, the face value of each share is ₹2.
The public issue set a price band of ₹475-500 per share. The Tata Technologies IPO closed on Friday. The stock market is closed on the weekend, and the allotment of shares is anticipated on Tuesday, 28th November 2023. Meanwhile, the listing date for Tata Technologies IPO is likely on Thursday, 30th November 2023.
The IPO, totaling ₹3,042.51 crore, comprises a sale of 4.63 crore equity shares by Tata Motors (₹2,313.75 crore). Furthermore, a sale of 97.17 lakh equity shares by Alpha TC Holdings Pte Ltd (₹485.84 crore). Additionally, a sale of 48.58 lakh equity shares by Tata Capital Growth Fund(₹242.92 crore). These figures are contingent upon finalizing the basis of allotment, as mentioned in the filing.
Tata Technologies’ IPO received bids for 312,649,1040 shares, surpassing the 450,292,207 shares on offer, according to NSE data. This IPO is noteworthy as it signifies the first from the Tata Group in almost two decades. Consultancy Services was the last to go public in 2004.
Tata Technologies IPO Sets New Record: 73.58 Lakh Applications, Beats LIC
Tata Technologies’ IPO, valued at Rs 3,034 crore, has successfully surpassed LIC’s record of a Rs 21,000-crore IPO. It draws a record 73.58 lakh applications.
Additionally, investors poured in Rs 1.57 lakh crore, oversubscribing the Tata Tech IPO 69.43 times with 73.58 lakh applications. The subscription period closed on Friday.
Furthermore, Tata Tech has outperformed LIC’s previous record of 73.38 lakh applications in May 2022.
In comparison, on Dalal Street, Reliance Power secured the third position with 48 lakh IPO applications in January 2008.
Tata Tech’s Public Share Sale
The Tata Tech IPO attracted significant investor interest. The QIB portion subscribed 203 times, and the HNI portion received bids 62 times the offer. Simultaneously, the retail segment saw a subscription of 16.5 times.
Looking ahead, the IPO is expected to be listed on stock exchanges next week. The exact date is yet to be announced.
The IPO includes an Offer for Sale (OFS) of 65,850,278 shares. Promoter Tata Motors and two other investors—Alpha TC Holdings and Tata Capital Growth Fund-I—are selling their stakes.
Tata Technologies is a company that focuses on manufacturing-focused Engineering Research and development in the automotive industry. Currently, it collaborates with 7 out of the Top-10 automotive ER&D spenders. Additionally, they work with 5 out of the 10 prominent new energy ER&D spenders in 2022.
Having recently secured empanelment by Airbus, Tata Tech foresees this partnership as a robust avenue for growth.
Moreover, the grey market suggests potential listing gains of around 70%. Brokerages recommend investors subscribe to the issue for both immediate gains on Day 1 and long-term benefits.
Post IPO, Tata Motors’ stake in Tata Tech will decrease from 64.79% to 53.39%. At the upper price band, the manufacturing-focused engineering research and development Company serves the automotive industry. It is valued at Rs 20,283 crore. This valuation is based on a PE of 32.5x.
Tata Tech IPO Subscribed 70 Times, Breaking Records
Dalal Street experienced record-breaking moments as the House of Tata’s first IPO in almost 20 years surpassed expectations.
As of 6:06 p.m. on Friday, the last day of the three-day share sale, stock exchange data revealed. The data shows an astounding subscription of 69.43 times for the Tata Technologies IPO. The IPO consisted of a pure offer-for-sale of 6.08 crore shares.
During the closing hours, qualified institutional buyers expressed tremendous interest, subscribing 203.41 times the allocated shares. Additionally, non-institutional investors showed robust demand, surpassing the allotted amount by 62.11 times. Tata Motors Ltd. shareholders and individual investors subscribed 16.5 and 29.19 times, respectively.
Atul Mehra, joint managing director at JM Financial, and the lead manager to the Tata Technologies IPO, conveyed that the response from all categories of investors—QIBs, NIIs, and retail—has been remarkable. He declared the Indian IPO witnessed the best response in terms of bid value and the number of applications.
While it’s premature to discuss the listing, Mehra expressed hope for an equally strong performance.