Tata Technologies LTD IPO - Review, Valuation, Date & GMP

Tata Technologies Limited IPO - Complete Overview

People were looking forward to hearing about Tata Tech's IPO. Now that we know all the details, it seems like the market's grey market premium (GMP) is suggesting a chance for a good profit when the stock officially goes public. Today, we'll compare Tata Tech with similar companies to see not just the possible quick gain but also how well it might do in the long run.

Here's a question: Is it a good idea to buy Tata Motors shares now and apply for Tata Tech IPO with a reservation benefit? And can Tata Motors DVR shareholders benefit too? I've got some unique data that you might not find elsewhere, so keep it for future reference. Also, there's a question about the HNI quota, which could be interesting for many people looking to apply.

But before we dive into that, let's take a quick look at Tata Technologies, a big player in Information Technology and Automation since 1989. They're really good at what they do and are the top company in India for engineering and research services. They're also among the best two companies globally when it comes to electrification, which is making things work with electricity. As of September 30, 2023, Tata Technologies is in Europe, North America, and the Asia Pacific through 19 centers worldwide.

So, as we explore Tata Tech's IPO details, stay tuned for an interesting story about Ratan Tata's vision for the Nano, the world's cheapest car, and the engineers who made it happen.

 

Detailed Video

 

What does the company do?

Now, let's break down what Tata Technology does.

Simply put, Tata Technology is a tech company that mainly focuses on four things: Automotive, Aerospace, Industrial Machinery, and Industrials. In easy terms, they do research and development to figure out what kind of products are good for things like cars, airplanes, or factory machines. They also create software solutions to help companies manage their products better. To really understand where most of the money comes from, it's important to look at how much they earn from each of these areas.

Tata Technology is a big company with 9,300 employees worldwide. They have centers in different places, including Pune (where their main office is), Gurgaon, Bengaluru, Thane, Chennai, and also in other countries like the UK, USA, China, Thailand, Singapore, Tokyo, Hanoi, Europe, Romania, Sweden, and Germany.

 

Tata Technologies Limited IPO Overview

Tata Technologies' IPO’s opening date is slated to be open for subscription from November 22, 2023, to November 24, 2023. This BSE NSE IPO follows a Fixed Price Issue IPO.

The price for each share is expected to be between Rs. 475 and Rs. 500. The company is selling about Rs. 3,042.51 crores worth of shares, and all of it is what they call an "Offer for Sale" (OFS). In this case, Tata Motors, the current owner of Tata Tech, is selling 4.62 crore shares, which is worth around Rs. 2,314 crores. So, Tata Motors is going to get Rs. 2,314 crores from selling these shares.

Here's something interesting Tata Tech has set aside about 60.85 lakh shares for people who already own Tata Motors shares. They also have 20.28 lakh shares reserved for their own employees. This means that these groups get a special chance to buy shares before the IPO opens to everyone else.

To sum it up, Tata Technologies' IPO is opening for people to buy shares from November 22 to November 24, and the company will be listed on the stock exchange on December 5, 2023. The total value of all the shares they're selling is up to Rs. 3,042.51 crores, and 35% of it is for regular people like you and me.

 

Tata Technologies Limited IPO timetable (Tentative)

EVENTS	DATE
IPO Opening Date	22 Novemer 2023
IPO Closing Date	24 Novemer 2023
IPO Allotment Date	30 Novemer 2023
Refund initiation	1 December 2023
IPO Listing Date	5 December 2023

 

Tata Technologies Limited IPO Details

IPO Opening & Closing Date	22 November to 24 November 2023
Face Value	Rs. 2 per share
Issue Price	Rs. 475 to Rs. 500 per Share
Lot Size	30 Shares
Price of 1 Lot	Rs. 15000
Issue Size	60,850,278 Shares (aggregating up to Rs. 3,042.51 Cr)
Offer for Sale	60,850,278 Shares of Rs. 2 (aggregating up to Rs. 3,042.51 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Pvt. Ltd.

 

 

Tata Technologies Limited IPO Lot Details

Category	Lots	Shares	Amount
Minimum Lot Investment (Retail)	1 lot	30	Rs. 15,000
Maximum Lot Investment (Retail)	13 lot	390	Rs.195,000
Minimum Lot Investment (HNI)	14 lot	420	Rs. 210,000
Maximum Lot Investment (HNI)	66 lot	1,980	Rs. 990,000

 

Tata Technologies Limited IPO Reservation

QIB Shares Offered	50%
Retail Shares Offered	15%
HNI Shares Offered	35%

 

Company Financial

Tata Tech's financial performance is quite impressive. In the fiscal year 2023, its profit increased by 42.8% to reach Rs. 624 crore, while its revenue grew by 25% to Rs. 4,414.2 crore. In the first half of this fiscal year, until September, the company's profit saw a 36% increase, totaling Rs. 351.9 crore, whereas its revenue grew by 34%, reaching Rs. 2,526.7 crore.

(Amount in Crores)

Period	FY 23	FY 22	FY 21
Total Assets	5,201.49	4,218.00	3,572.74
Total Revenue	4,501.93	3,578.38	2,425.74
PAT	624.04	436.99	239.17
Net worth	2,989.47	2,280.16	2,142.15
Reserve & Surplus	2,605.60	2,028.93	1,897.46

 

Revenue-Breakdown Segment-wise

First, let's understand the Tata Technology's business. As the name suggests, it is a technology provider that primarily focuses on four verticals: Automotive, Aerospace, Industrial Machinery, and Industrials.

In simple terms, Tata Technology conducts research and development to determine the most suitable products for vehicles, airplanes, and factory machinery. The company provides software solutions for managing products in various industries. Understanding the most crucial aspect here is to analyze how much revenue comes from each segment.

(amount in % age)

Particulars	FY 23	FY 22	FY 21
Services Segment:	80%	75.12%	80.40%
(a) Automotive	70.94%	64.51%	66.08%
(b) Others	9.05%	10.61%	14.32%
Technology Solutions	20%	24.88%	19.60%

 

Revenue break-up - Geography-wise

Tata Technology has customers all over the world including North America, Europe, and Asia Pacific countries. They have a total of 9,300 employees. The company's main office is in Pune, and they have 18 other centers in places like Gurgaon, Bengaluru, Thane, Chennai, the UK, USA, China, Thailand, Singapore, Japan, and various locations in Europe. These places are where the company operates and serves its clients.

(amount in % age)

Revenue from operations	FY 23	FY 22	FY 21
India	29.76%	32.40%	28.98%
Europe	22.83%	24.34%	30.96%
North America	21.44%	22.44%	31.86%
Rest of World	25.97%	20.82%	8.20%

 

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Gain advantages by listing Equity Shares on Stock Exchanges.
• Conduct an Offer for Sale, selling up to 95,708,984 Equity Shares by the Selling Shareholders.

 

Promoters and Management of Tata Technologies Limited

The company's Management and promoters include 

Pre-issue Promoters Holding	66.79%
Post-issue Promoters Holding	55.39%

 

Comparison with Listed Peers

I have brought an important parameter for peer comparison, which should always be considered. There are many parameters, but I will focus on the most important ones...

1. Revenue is the money generated from normal business operations. In terms of revenue for FY23, L&T Technology Services reported the highest revenue, with TTL following on the list.
2. PE ratio, or Price-to-Earnings ratio, indicates how much an investor needs to invest to earn Rs. 1 from the share market. Tata Tech has a PE ratio of 32x, which is the lowest and considered favorable.
3. Profit is what remains after covering business expenses. Here, LTTS is at the top, and Tata Tech is in third place.
4. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Again, in this aspect, LTSS is in the lead, with Tata Tech in the third position.
5. EPS (Earnings Per Share) is a crucial number that tells how much profit a  company is making per share in a fixed time interval. For investors, EPS is an important indicator of a company's earning power. Tata Tech has an EPS of 15.38, which is better than KPIT Tech's 14.10. However, the best performers are Tata Elxi and LTTS

 

(Amount in Crores)

Name of the Company	P/E for Financial Year 2023	Profit	Revenue from operations for Financial Year 2023
Tata Technologies Limited	32.53	624.04	4414.18
KPIT Technologies Limited	80.31	386.86	3365.03
L&T Technology Services Limited	37.47	1169.80	8013.6
Tata Elxsi Limited	61.55	755.20	3144.72

 

 

IPO's Valuations

To evaluate the IPO's valuation, we can utilize the information presented in the company's DRHP. Tata Technologies IPO share is fixed at Rs. 475 to Rs. 500 per share, with an EPS of Rs. 15.38. Based on the issue price the company's P/E ratio is calculated at 32.53.

 

Dividend Policy

In FY 2023, the company distributed a dividend of Rs.12.30 per share. However, prior to this, they distributed a dividend of Rs. 40 in FY 2020. The potential future dividends will depend upon the company's financial performance.
 

 

IPO's Strengths

• Extensive expertise in the automotive industry.
• Comprehensive solutions for electric vehicle (EV) development, manufacturing, and post-sales support.
• Robust digital capabilities strengthened by their unique tools.
• A diverse global presence spanning Asia Pacific, Europe, and North America, and collaborations with some of the world's largest manufacturing enterprises.

 

IPO Weaknesses

• Most of their money comes from their top 5 customers.
• They rely a lot on the car industry for their money, and if it's not doing well, it can affect how they do business, make money, and manage their cash.
• If people aren't sure about electric cars in the future, it might make it harder for them to plan their work and handle their money.

 

 

IPO GMP Today

The Latest GMP of Tata Technologies IPO is Rs 395. 

 

Conclusion

The Tata Technologies IPO is set to be open for subscription from November 22 to November 24, 2023, which seems an attractive opportunity for retail investors. The company is a key player in IT and Automation, with a global presence. Tata Technologies displays steady financial growth with strengths in automotive expertise, but potential weaknesses include customer dependence. The competitive P/E ratio of 32.53 and the company's dividend policy add to its appeal. Despite the promising outlook, investors should conduct due diligence, consider risks, and align decisions with their risk tolerance.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

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