Tata Technologies was the most sought after issues among the recent IPOs and attracted heavy applications from all category of investors. The ₹3,043-crore IPO was subscribed 69.43 times. As Tata Technologies is the first company to hit the capital market in 20 years from Tata Group after TCS, the listing is being closely monitored by all. The company has fixed the issue price at ₹500, upper end of the price band ₹475-500.
Qualified institutional buyers (QIBs) were the most keen as their portion was subscribed 203.4 times, followed by non-institutions by 62 times. The quota of retail investors was subscribed 16.5 times. Tata Tech IPO’s employee portion was received bids for 3.70 times while reservation for Tata Motors shareholders was subscribed 29.20 times.
Prashanth Tapse, Research Analyst, Sr VP Research, Mehta Equities Ltd, said: considering overwhelming subscription demand and investor friendly pricing, Tata Technologies could see a strong listing gain of over 75 per cent against the issue price of ₹500 a share. “There is a high possibility that Tata Technologies can be a doubler candidate post listing, he added.
“We believe the super listing premium is justified mainly on the back of Tata parentage tag that enjoys first preference among investors community and its unique well established global business model which has been generating healthy margins in the sector it serves. Given the growth potential in outsourcing, the business model would be in great demand going forward. Hence considering all these factors, we recommend allotted investors to book 50 per cent profits over and above our expectations and retain the rest of the holding for long term considering healthy long term returns post listing,” he added.
Promoter Tata Motors offloaded 4.62 crore equity shares, which is worth ₹2,314 crore in the offer-for-sale. Investors Alpha TC Holdings Pte Ltd will be selling 97.17 lakh shares worth ₹486 crore. Tata Capital Growth Fund I will sell 49 lakh shares worth ₹243 crore.
Tata Technologies had raised ₹791.05 crore as part of IPO process from anchor investors. Among the marquee investors included Goldman Sachs, Government Pension Fund Global, BNP Paribas Funds, Prudential Assurance Company, HSBC Global, Florida Retirement System, Oaktree Emerging Markets Equity Fund, Brinker Capital Destinations Trust, Great Eastern Life-Singapore Life Insurance Fund, RBC Asia Pacific Ex-Japan Equity Fund and Copthall Mauritius Investment.
Domestic mutual funds and insurance companies, including SBI Mutual Fund, ICICI Prudential Mutual Fund, Nippon Life, Aditya Birla Sun Life Trustee, Franklin Templeton Mutual Fund, SBI Life Insurance Company, Kotak Mutual Fund, DSP Mutual Fund, HDFC Life Insurance Company, Mirae Asset Mutual Fund, Bandhan Mutual Fund, Edelweiss Trusteeship, Motilal Oswal Mutual Fund, Sundaram Mutual Fund, Axis Mutual Fund, Canara Robeco Mutual Fund, Kotak Mahindra Life Insurance Company, JM Financial Mutual Fund, Bajaj Allianz Life Insurance Company, and Bharti Axa Life Insurance Company also participated in the anchor portion.
Incorporated in 1994, Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEM) and their tier 1 suppliers.
Backed by Tata Motors, the company boasts extensive knowledge in the automotive sector and has expanded its expertise into aerospace and heavy construction machinery, enhancing its commercial opportunities. As of September 2023, it had 12,451 employees
Investors who failed to get allotments in the public offer can accumulate Tata Technologies on every dips post listing for a long term, said Tapse.