Tata Technologies stock soars after smashing debut, valued at $6.4 billion

Shares of India's Tata Technologies settled nearly three-fold higher on their trading debut on Thursday, valuing the first Tata Group company to go public in nearly two decades at 532.64 billion rupees ($6.4 billion).

The Tata Motors' unit, which provides engineering and technology services to auto, aero and heavy machinery makers, beat the valuation of its peers like KPIT Technologies and L&T Technology Services.

Tata Technologies' listing-day gains were also among the best since 2021-end, according to LSEG data and analysts.

The shares surged past the initial public offer price of 500 rupees to debut at 1,200 rupees before hitting the day's high of 1,400 rupees and ending 163% higher at 1,313 rupees.

"The listing was beyond imagination... and post that, the rally to 1,400 rupees was even more unexpected," Arun Kejriwal, founder of Kejriwal Research and Investment Services, said, adding that short-term investors could book profits.

The company's future earnings through a part of financial year ending March 2025 appear to have been discounted at the current valuation, Kejriwal added.

Tata Technologies' valuation has topped that of its peers KPIT Technologies, L&T Technology Services and sister Tata Group company Tata Elxsi, which are valued between 409 billion rupees and 514 billion rupees.

IT services provider Tata Consultancy Services, which listed in 2004, was the last Tata Group company to go public.

India has seen a record 201 IPOs so far this year, while share benchmarks have scaled record highs on improving economic growth prospects.

Shares of the other stock market debutantes on Thursday, Fedbank Financial Services and Gandhar Oil Refinery, closed 0.2% and 78.3% higher, respectively.

Pharmaceutical company Sigachi Industries and Paras Defence & Space had climbed as high as 270% and 171%, respectively, on listing in 2021, Aditya Kondawar, Vice President of Complete Circle Capital, said.