Fortunate individuals who secured shares in the Tata Tech IPO are experiencing substantial gains as the company marked an impressive stock market debut on November 30, opening at a 140 percent premium over the IPO price.
Trading at Rs 1,200 on the NSE and Rs 1,199.95 on the BSE, the stock’s issue price was Rs 500.
Tata IPO Attracts Huge Interests
The IPO attracted significant interest, with over 73.38 lakh total applications and a subscription rate of 69.43 times. Qualified institutional buyers (QIBs) oversubscribed their quota by a remarkable 203.41 times, while non-institutional investors (NIIs) and retail investors subscribed 62.11 times and 16.50 times, respectively.
The IPO, entirely an offer-for-sale (OFS) by promoters Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund 1, raised Rs 3,042.52 crore with a price band of Rs 475-500 per share.
Despite strong demand and investor trust in the Tata name, concerns arose, notably regarding revenue concentration from the top five clients, contributing 63.9 percent to the FY23 topline and 57 percent in H1 FY24. CEO Warren Harris addressed this concern, stating that Tata Motors and JLR’s contribution to Tata Technologies would decrease in the medium to long term, emphasizing operational independence.
Tata Technologies, a manufacturing-focused engineering research and development (ER&D) company, has outpaced competitors like Tata Elxsi, L&T Technologies, and KPIT Technologies in revenue CAGR over the last three years. With an EBITDA margin of 23.7 percent, in line with industry standards, and a P/E ratio of 18.2x, analysts consider the Tata Technologies IPO to be reasonably priced.
Tata Technologies IPO Listing
The initial public offering by Tata Technologies Ltd witnessed a remarkable response from the investor with a subscription of 69.4 times.
This IPO by a Tata Group company comes in nearly two decades and was open for subscription from November 22 to 24.
It appears that the investor has shown interest as they have purchased 312.65 crore equity shares against the offer size of 4.5 crore shares, reflecting a substantial demand.
Media reported that the total bids amounted to Rs 1.56 lakh crore worth of shares in just three days.
This Rs 3,042.51 crore IPO was open for subscription for three days and it was offered at a price range of Rs 475-500 per share.
