Tata Motors subsidiary Tata Technologies, on March 10, filed a draft red herring prospectus (DRHP) with the market watchdog Securities and Exchange Board of India (SEBI) regarding fundraising through an initial public offering (IPO).
This IPO will entirely be an offer for sale (OFS) of up to 95.71 million shares, or approximately 23.60 percent of the paid-up share capital.
Tata Motors offers up to 81.13 million equity shares or 20 percent of the paid-up capital in the IPO. Alpha TC Holdings Pte will offload up to 9.72 million shares or 2.40 percent of paid-up capital. Tata Capital Growth Fund I is shedding up to 4.86 million shares or 1.20 percent of Tata Technologies’ paid-up share capital.
Tata Motors, at present, has a 74.69 percent stake in the company, while Alpha TC Holdings Pte and Tata Capital Growth Fund I have ownership of 7.26 percent and 3.63 percent, respectively.
Notably, it is for the first time in almost two decades that a Tata Group company will be listing its shares on Indian bourses. Last, it was Tata Consultancy Services in 2004.
Financial Highlights:
DRHP shows the company generated Rs 3011.7 crore in revenue from operations for the nine months ended December 31, 2022, up from Rs 2607.3 crore for the same period in 2021.
Profit after tax was Rs 407.4 crore for the nine months ended December 31, 2022, again up from Rs 331.3 crore in the same period last fiscal year.
The company reported a revenue of Rs 3529.6 crore in fiscal 22, with an operating profit of Rs 645.6 crore and a profit after tax of Rs 437.0 crore in the same period.
About Company:
Total headcount, including full-time and contracted personnel, rose from 8,620 as of March 31, 2020, to 11,081 on December 31, 2022, stretched across 18 delivery centers in the US, Europe, India, China, Japan, and Singapore.
Tata Technologies, under the aegis of Warren Harris, provides engineering and design, manufacturing, and product development solutions to automotive, industrial heavy machinery, and aerospace industries.
Its expenditure on global engineering research and development (ER&D) in 2021 was approximately $1.64 trillion, expected to grow to $2.28-2.33 trillion by 2025.
The ER&D spend outsourced to third-party service providers amounted to $85-$90 billion in 2021, which may grow 10-12 percent CAGR between 2021 and 2025, according to a Zinnov report cited in the draft prospectus.
Book Running Lead Managers: Lead managers to the issue are: JM Financial Ltd, BofA Securities, and Citigroup Global Markets India Pvt Ltd.