Two decades after it launched the IPO of Tata Consultancy Services (TCS), Tata Group has now filed draft papers for IPO of Tata Technologies (TTL), a subsidiary of Tata Motors. The simple thing that TCS went on to become India’s bellwether information technology company after its 2004 IPO, is likely to lead to historic over subscription for Tata Technologies. Excitement from retail investors will be high, analysts said.
The IPO consists of offer for sale (OFS) of up to 9.571 crore shares, with Tata Motors offering up to 8.113 crore shares, Alpha TC Holdings Pte offering up to 97.20 lakh shares, and Tata Capital Growth Fund I offering up to 48.6 lakh shares
Multi-bagger TCS
In two decades that it was listed, TCS turned the minimum subscription of ₹85,000 then to ₹26 lakh in nearly two decades and has been among the most successful IPOs of Indian markets. Then, the ₹4,400-crore IPO was subscribed by 5.8 times with the qualified institutional portion subscribed by 7 times and retail portion subscribed 1.5 times
.“Excitement will be high. Tata Technologies caters to the high-growth clean energy sector, which holds lot of promise. Tata Motors along with JLR are its anchor clients comprising 40 per cent revenue and with same customers giving repeat business of up to 95 per cent, revenue stream is stable. Tata Motors is only part-monetising its 75 per cent holding in this debt-free company. Post IPO, Tata Tech will be a 55 per cent subsidiary of Tata Motors,” said Geetanjali Kedia, IPO experts at SP Tulsian Investment Advisers.
TTL is led by company veteran Warren Harris and has a workforce of over 11,081 employees spread across 18 delivery centres in the US, Europe, India, China, Japan, and Singapore.
According to the annual report of the company for the year 2022, Tata Motors owns a 74.42 per cent stake in TTL.