Following an incredible response to the IPO, Tata Technologies’ stocks are highly sought after in the unlisted market, reaching a GMP of up to Rs 412.
Projected to list at a substantial premium of Rs 82% above the issue price, considering the upper price band of Rs 500, the demand for Tata Technologies’ shares is evident.
It’s important to note that grey market premiums serve as indicators of the company’s standing in the unlisted market and can change rapidly.
The tentative allotment date for the IPO is slated for November 28 or potentially earlier, with the anticipated listing on November 30.
With bids worth over Rs 1.5 lakh crore against the Rs 3,042 crore IPO, Tata Technologies received a subscription of nearly 70 times the shares offered.
Retail individual investors (RIIs) subscribed 16 times, while qualified institutional buyers went as high as 203 times, and non-institutional investors (NIIs) at 62 times.
Industry analysts attribute the strong IPO response to the company’s attractive valuations relative to its peers and the robust brand value associated with the Tata lineage.
Comparatively, Tata Tech’s FY23 PE ratio stands at 32-33x, far lower than KPIT’s 105x, L&T Technology Services’ 40x, and Tata Elxsi’s 70x. Moreover, it has outpaced its peers in financial growth between FY21-23.
Tata Technologies specializes in manufacturing-focused engineering research and development (ER&D), particularly in the automotive sector.
They presently engage with seven of the top 10 automotive ER&D spenders and five out of the top 10 new energy ER&D spenders in 2022. As of FY23, their revenue comprises 80% from services, 11% from products, and 9% from education.
Key strengths of the company include expertise in emerging automotive trends like electric vehicles, profound knowledge of the automotive industry, and a scalable global delivery model facilitating close client engagement.
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