Tata Motors subsidiary company Tata Technologies has filed an addendum to its Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI). It is after 19 years that a Tata Group company is going to list on the stock market.
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The company’s initial public offering comprises an offer for sale of up to 95,708,984 equity shares for cash (equity shares).
The offer for sale consists of up to 81,133,706 equity shares by Tata Motors Limited, up to 9,716,853 equity shares by Alpha TC Holdings Pte. Ltd. and up to 4,858,425 equity shares by Tata Capital Growth Fund I, each representing up to 20%, 2.40% and 1.20%, respectively of Tata Technologies’ paid-up share capital.
The offer now includes a reservation of up to equity shares (constituting up to 0.50% of the post-offer paid-up equity share capital of our company) aggregating up to million for subscription by eligible employees (The Employee Reservation Portion) and a reservation of up to equity shares (constituting up to 10.00% of the offer) aggregating up to million, for subscription by eligible Tata Motors Limited shareholders.
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JM Financial Limited, Citigroup Global Markets India Private Limited, and BofA Securities India Limited are the Book Running Lead Managers to the issue.
Tata Technologies IPO Price Band
According to experts, the company may offer its shares in the initial issue between Rs. 280 - Rs 320.
"Tata group carries a strong reputation of trust and legacy. The Tata Tech company is a leading player in the automotive ER&D services globally. If we compare with its peer’s valuation, Tata technologies IPO may open at higher price but to keep enough space for the investors, the IPO may open around the price band of Rs. 280 - 320,” Ravi Singh, market expert, was quoted as saying by Hindustan Times.
Vaibhav Kaushik, research analyst, GCL Broking, was quoted as saying,"Since the company has proposed 405,668,530 shares for listing on the Indian stock exchanges, the IPO price of Tata Technologies would be around ₹295. So, in case of a neck-and-neck race in valuations, the IPO price of Tata Technologies can be expected around ₹295".
“Sometimes, companies offer their shares at a discount of 10-15 points to make them more attractive to investors. In this case, Tata Technologies' IPO price could be between ₹265 and ₹270 per share. However, when expectations of response are high, companies also try to maximise their returns and therefore offer their shares at valuations that are the same percentage points higher. In this case, Tata Technologies' IPO price is likely to be ₹315 to ₹320 per share”, he added.