Tata Autocomp Systems plans to come out with its initial public offering in about a month with an issue size of around Rs 1,100 crore, a company official said on Tuesday.
The company had filed its draft red herring prospectus in December last year.
The issue size includes capital of Rs 750 crore that it plans to raise through the issue of fresh shares, while the remaining will come from the sale of a further 35.63 million shares in the possession of other Tata Group firms.
After the issue, 25 per cent of the company shares will be with common shareholders as public float.
“We are yet to file the final RHP, but we should be able to hit the market in about a month. SEBI had raised few small queries on the DRHP, which we should clear very soon,” a company official told Business Line .
According to a SEBI Web site, observations have been issued to the company on June 13 for certain clarifications.
Tata Autocomp plans to use the fresh funds for its capital expenditure, investment in its subsidiaries and to retire its debt.
At present, its primary customer, Tata Motors, is one of the largest share holders in the auto parts supplier. The other stakeholders are Tata Industries, Tata Sons, Tata Capital and Tata Investment Corp.
With sales crossing Rs 4,400 crore, the company has seven joint ventures and nine global partners. It manufactures a variety of components such as plastic parts, batteries, seating systems, wiring harnesses and rear-view mirrors.
Some of the other customers include Fiat, Toyota Kirloskar Motor, General Motors, Mahindra & Mahindra and Ashok Leyland.
Crisil has assigned a IPO grade of 3/5 to the proposed IPO of Tata Autocomp Systems Ltd. This grade indicates that the fundamentals of the IPO are average relative to the other listed equity securities in India.
“The grade is constrained by the highly competitive nature of the auto component industry due to the presence of few dominant OEMs (original equipment manufacturers) and a large number of auto component manufacturers,” said a Crisil report.