MUMBAI - Tata Technologies Ltd, an engineering and product development digital services company, has announced the price band for its initial public offering (IPO) at Rs 475 to Rs 500 per share, which is notably lower than its current unlisted market price of Rs 950. The firm's stock has experienced a significant uptick since June 2020, driven by anticipation of its listing, and reached a high of Rs 1010 in July 2023.
The IPO is scheduled to open on November 22 and will close on November 24, with the allotment of shares and their credit to Demat accounts expected to occur on November 30 and December 1, respectively. The company is set to be listed on the exchange on December 4.
Tata Technologies aims to raise approximately Rs 3042.51 crore through the IPO, which would value the company at around Rs 20,283 crore. The public offer includes an offer for sale (OFS) of up to 60.85 million shares from existing shareholders. Additionally, there are reservations within the IPO for employees and Tata Motors (NYSE:TTM) Ltd shareholders for up to 2.03 million and 6.09 million shares, respectively.
The company has demonstrated robust financial health with a price-to-earnings (PE) ratio for FY23 standing at a competitive 32.53 times. It reported a net profit increase of 36% year-over-year for the first half ending in September 2023, despite a slight decline in EBITDA margin to 18.39%. This financial uptick is supported by a substantial revenue jump of 33.8% year-over-year to Rs 2526.70 crore and a half-year net profit of Rs 351.90 crore compared to Rs 259.06 crore in the previous year.
Investors have shown interest in Tata Technologies' IPO as indicated by the grey market premium of Rs 230 per share over the upper end of the price band. This listing comes amid volatility in the unlisted market, as seen with other companies like AGS Transact and UTI AMC where lower IPO price bands have been set compared to their unlisted market prices.
The upcoming IPO provides an opportunity for investors to participate in Tata Technologies' growth story as it continues to expand its digital services offerings in engineering and product development sectors.
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