Tata Motors subsidiary Tata Technologies files IPO documents with Sebi

Last updated time: 10 Mar 2023 11:11 IST

Tata Technologies Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO). The IPO is only an offer for sale by the promoter of Tata Motors and two other shareholders and does not involve a fresh issue of shares.

“Tata Technologies, a subsidiary of Tata Motors Limited, today announces that it has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering on March 9, 2023,” Tata Motors said.

The issue consists of a net offer for sale of up to 95.71 million shares by the existing promoters and shareholders. OFS consists of 81.13 million shares of Tata Motors, up to 9.72 million shares of Alpha TC Holdings Pte and up to 4.86 million shares of Tata Capital Growth Fund I.

Tata Motors currently holds a 74.69 percent stake in the firm, while Alpha TC Holdings Pte holds a 7.26 percent stake. Tata Capital Growth Fund I has a 3.63 percent stake.

JM Financial Ltd, BofA Securities and Citigroup Global Markets India Pvt Ltd are the lead managers of the issue.

Tata Technologies, whose clients include Airbus SE, McLaren, Honda Motor and Ford Motor in addition to Tata Motors and JLR, will not sell any new shares in the IPO. JM Financial, Citigroup Global Markets India and BofA Securities India are managing the share sale.

This is the second IPO by the Tata Group since the listing of Tata Consultancy Services in 2004. Satellite television operator Tata Play submitted a preliminary draft red herring prospectus in December.

Headed by company veteran Warren Harris, the Pune-based firm boasts a workforce of over 11,081 employees spread across 18 delivery centers in the US, Europe, India, China, Japan and Singapore. Its competitors in the market include Cyient, Johnson Controls, Infosys, KPIT Technologies and Persistent.

The company is largely dependent on the Tata Group for business, particularly Tata Motors and Jaguar Land Rover. However, Tata Tech has increased its share of outsourced business. It increased from 46 percent in FY20 to 64 percent in FY22.

For the nine months ended December 2022, the firm reported revenue of Rs 3,011.79 crore against Rs 2,607.30 crore a year ago. Net profit for the period stood at Rs 407.47 crore against Rs 331.36 crore in the previous year. Its service segment revenue was 88.43 percent for the nine-month period and 85.88 percent of total revenue for FY22.

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