The Initial Public Offer (IPO) of Tata Technologies, a subsidiary of Tata Motors, was fully subscribed within minutes of opening for subscription on Wednesday. According to PTI, this is the first firm from Tata Group to float an IPO in nearly two decades. The IPO of Tata Consultancy Services (TCS) was the last one from the group in the 2004.
The Rs 3,042.5-crore IPO received bid for 8,73,22,890 shares against 4,50,29,207 shares on offer, translating into 1.94 times subscription according to NSE data until 11:21 hrs. The category for non-institutional investors was subscribed 2.72 times while the quota for Qualified Institutional Buyers (QIBs) received 1.98 times subscription. The portion for Retail Individual Investors (RIIs) got subscribed 1.63 times.
Tata Technologies' public issue is entirely an offer-for-sale (OFS) of 6.08 crore equity shares. Under the OFS, Tata Motors will offload 4.63 crore shares, representing 11.4 per cent stake, private equity firm Alpha TC Holdings will sell 97.17 lakh shares or 2.4 per cent stake, and Tata Capital Growth Fund I will do away with 48.58 lakh shares or 1.2 per cent of the shareholding.
Tata Technologies, which provides engineering and product development digital services, on Tuesday said it has collected Rs 791 crore from anchor investors. The public issue, with a price band of Rs 475-500 per share, will conclude on November 24.
Last month, Tata Motors inked a pact to sell a 9.9 per cent stake in Tata Technologies to TPG Rise Climate for Rs 1,613.7 crore.
Accoridng to news reports, most analysts have a positive view regarding the IPO, the low compound annual growth rate of revenue compared to peers, dependence on Tata Motors and Jaguar Land Rover, and concentration in the automotive segment are the major concerns.
JM Financial, Citigroup Global Markets and BofA Securities are the book-running lead managers to advise the company on the IPO. Equity shares of Tata Technologies will be listed on the BSE and NSE.