Tata Technologies Ltd has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).
The offering consists of a pure offer for sale of up to 95.71 million shares by its existing promoters and shareholders. The OFS includes up to 81.13 million shares in Tata Motors, 9.72 million shares in Alpha TC Holdings Pte, and 4.86 million shares in Tata Capital Growth Fund I.
Currently, Tata Motors holds a 74.69% stake in the company, while Alpha TC Holdings Pte holds a 7.26% stake. Tata Capital Growth Fund I holds a 3.63% stake in the company.
JM Financial Ltd, BofA Securities and Citigroup Global Markets India Pvt Ltd are the lead managers for the offering.
Tata Technologies specialises in product engineering and digital services for the automotive, industrial heavy machinery and aerospace industries. The company was established 33 years ago and had extensive experience in the field.
It offers various products and services for connected businesses, including engineering, research and development, digital enterprise solutions, education programs, value-added resale, and IT product lifecycle management services.
If Tata Technologies’ public offer outperforms Tata Play’s proposed IPO, it could mark the Tata group’s first public listing in 18 years.
Led by corporate veteran Warren Harris, the Pune-based company has more than 11,081 employees spread across 18 delivery centres 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 relies heavily on the Tata Group for its business, especially Tata Motors and Jaguar Land Rover. However, Tata Technologies has increased its share of the externally generated business. Its non-captive account contribution increased from 46% in FY20 to 64% in FY22.
For the nine months to December 2022, the company reported revenue of Rs 3,011.79 crore, compared to Rs 2,607.3 crore a year earlier. The net profit for the period was Rs 407.47 crore compared to Rs 331.36 crore last year. Its services segment revenue contributed 88.43% during the nine months and 85.88% of total revenue in FY22.