Tata Tech IPO opens Nov 22, first share sale by group firm in 2 decades

Selling shareholders include Tata Motors, Alpha TC Holdings and Tata Capital Growth Fund

Tata Technologies, an arm of Tata Motors, will launch its initial public offering (IPO) on November 22. It will be the first maiden share sale by a Tata group firm in nearly two decades. The last IPO from India's most valuable conglomerate was that of Tata Consultancy Services in 2004.

Tata Tech, a global engineering services company, filed its red herring prospectus (RHP) with the Registrar of Companies in Pune on Monday.

According to the latest RHP, the IPO will consist of an offer for sale of 60.85 million shares. The selling shareholders include Tata Motors (to divest 46.3 million shares, or 11.41 per cent stake), Alpha TC Holdings (9.72 million shares, or 2.4 per cent) and Tata Capital Growth Fund (4.86 million shares, or 1.2 per cent).

Tata Tech had cut its IPO size by more than a third. When the company had filed its draft RHP with market regulator Sebi in March, it had intended to sell 95.71 million shares, or 23.6 per cent equity.

Back then, Tata Motors had plans to sell 81.33 million shares in the IPO. The shares to be divested by Alpha TC and Tata Capital Growth Fund remain the same.

In October, however, Tata Motors had sold 9.99 per cent stake in Tata Tech for Rs 1,613.7 crore to investors led by private equity major TPG. This valued the company at about Rs 16,137 crore.

The company is expected to announce its price band and IPO valuation closer to the IPO date.

About a tenth of the shares to be sold in the IPO are reserved for the shareholders of parent Tata Motors. The IPO closes on November 24.

Tata Tech offers product development and digital solutions to original equipment manufacturers.

Three more IPOs to hit the market next week
 

Besides Tata Technologies, three more IPOs will hit the market between November 21 and November 24. These include that of state-owned project financer Indian Renewable Energy Development Agency (IREDA), non-bank lender Fedbank Financial Services and consumer oil manufacturer Gandhar Oil Refinery. Market sources said IREDA’s IPO size could be in excess Rs 2,200 crore, Fedbank’s estimated issue size is Rs 1,000 crore, while that of Gandhar Oil is around Rs 500 crore. So far in November, five IPOs have raised a cumulative Rs 5,400 crore. The biggest of the lot were Cello World, which raised Rs 1,900 crore, followed by Honasa Consumer (Mamaearth), which mopped up Rs 1,700 crore.
 

BS REPORTER