Tata Technologies, a key player in engineering and technology services for the automotive, aerospace, and heavy machinery sectors, experienced a swift response to its much-anticipated INR 30.43 bn initial public offering (IPO). The oversubscription within hours of bidding initiation signals robust demand, marking the Tata Group’s first public float in nearly two decades.
Swift subscriptions
Tata Technologies’ IPO, priced in the range of INR 475-500 per share, attracted significant attention, with bids totalling INR 65.15 bn (USD 782.64 million) by Wednesday afternoon. The oversubscription reached 2.89 times, as investors sought over 130.3 million shares against the 45 million shares available.
Impact on Tata Motors
Following the IPO, Tata Motors’ stake in Tata Technologies is set to decrease from 64.79% to 53.39%. The announcement coincided with positive market movements for Tata Motors on the Bombay Stock Exchange (BSE) after CLSA revised its target for the company.
Market reaction
Tata Motors’ shares saw positive traction, trading higher by 0.18% at INR 682.20 on Wednesday. The surge followed CLSA’s revised target and aligned with the day Tata Technologies’ IPO, the first from a Tata Group company in 19 years, achieved full subscription.
Record-breaking Indian IPOs
This development occurs against the backdrop of record-breaking Indian IPOs in 2023, with 194 companies going public. India’s thriving equity market, reaching all-time highs, is drawing global attention due to economic growth prospects and a substantial consumer base.
Financial dynamics
The IPO, involving stake sales worth INR 30.43 billion by stakeholders, including Tata Motors, positions Tata Technologies with an estimated valuation of INR 202.83 billion at the upper end of the price band. Notably, Tata Technologies does not plan to issue any fresh shares as part of the IPO.
Closing and trading debut
The IPO subscription window is set to close on Friday, with expectations for Tata Technologies to make its trading debut on November 30. The successful response to the IPO underscores investor confidence and appetite for opportunities within the rapidly evolving Indian market.