IPO listed on 30 Nov'23
Tata Technologies Ltd
Minimum Investment
₹ 15,000 / 30 shares
Grey market premium
₹ 355 (71% premium)
Issue price
₹ 500
Listing price
₹ 1,200
Listing day %
163%
Listing on
Nov 30, 2023
Our Verdict:
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- For the first time in over 19 years since the TCS IPO in 2004, another company from the Tata group is launching its IPO through an Offer for Sale (OFS). The issue is attractively priced with a price to earnings (P/E) ratio of 28.8x based on the projected earnings for FY24. Additionally, the grey market premium (GMP) also suggests a potential premium on listing.
- Tata Technologies possesses significant expertise in the automotive sector and unique capabilities for addressing emerging trends. It is a well-established brand backed by experienced promoters and has demonstrated robust financial growth.
- Considering the firm’s impressive performance history, reasonable valuations, and the long-term opportunities in the ER&D segments of automotive and aerospace, investors are advised to consider this offering for long-term investment.
About the company
Founded in
22 Aug'94
Managing director
Warren Kevin Harris
- Tata Technologies (Tata Tech) is a specialized Engineering Research & Development (ER&D) company, with a primary focus on the automotive sector. In 2022, they collaborated with seven of the top ten automotive ER&D investors and five of the leading ten new energy ER&D spenders.
- The firm’s primary offerings encompass outsourced engineering services and digital transformation solutions for international manufacturing clients, assisting in the ideation, design, development, and delivery of enhanced products.
STRENGTHS
- Leading Market Position: Tata Tech is recognized as the top India-based ER&D service provider and holds a position among the top two globally in the field of electrification.
- Robust Financial Performance: Between FY21 and FY23, the firm demonstrated remarkable growth, with a 36% compound annual growth rate (CAGR) in Revenue, a 46% increase in EBITDA, and a 62% surge in Net Profit. The Return on Net Worth was a healthy 20.87%.
- Enhanced Profitability: Operating margins rose from 16.2% in FY21 to 18.6% in FY23, while net profit margins also improved from 10.05% to 14.14%.
- Strong Alliances: The firm has formed significant partnerships with Dassault, Logility, Siemens Industry Software Inc, Codincity, and Fantasy, and leveraged Microsoft AZURE products/services to broaden their market reach. The recent addition of Airbus to their client base is anticipated to be a major growth driver.
- Investor-friendly company: The firm paid a hefty dividend of 615% for FY23. They had adopted a dividend policy in February 2023, reflecting their financial success and growth potential.
RISK FACTORS
- Revenue Concentration: As of September 2023, the top 5 clients accounted for ~57% of the revenue from operations. Financial instability among these key clients could significantly impact the company's business and financial performance.
- Cash Flow Concerns: For the quarter ending on September 30, 2023, the firm reported a negative operational cash flow of Rs 7.8 crore. Sustained negative cash flow or significant liquidity crunches could impair the company's ability to maintain its operations.
- Ongoing Legal Issues: The company is currently involved in legal disputes totalling Rs 7,447.6 crore. Unfavourable outcomes from these disputes could lead to significant liabilities/ penalties and negatively influence their business operations, financial performance, cash flow, and public image.
Issue details
Issue type
Mainstream
Issue size
₹ 3,042.51 crore
Fresh Issue
₹ -
OFS
₹ 3,042.51 crore
Price range
₹ 475 - 500
Lot size
30 shares
Issue Objective
This issue is a pure Offer for Sale (OFS), which means the company will not receive any proceeds from the offer. All the offer proceeds will be received by the selling shareholders, in proportion to the shares sold by them.
Dates
Bidding open
22 Nov'23
Bidding close
24 Nov'23
Allotment date
27 Nov'23
Refund date
28 Nov'23
Listing
30 Nov'23
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.