The initial public offering (IPO) of Tata Technologies is all set to hit Dalal Street next week. This will be the first IPO by the renowned Tata Group in almost two decades, after Tata Consultancy Services Ltd (TCS). Here are all the key things u need to know about the IPO of Tata Technologies:
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Q1. When will the Tata Technologies IPO open and close for bidding?
Ans: Tata Technologies IPO will open on Wednesday, November 22 and close for bidding on Friday, November 24. Investors should note that IPO bidding usually happens between 10 am to 5 pm on the IPO days.
2. What is the price band and lot size for the Tata Technologies IPO fixed by the company?
Ans: The company will be selling its shares in the range of Rs 475-500 apiece with a lot size of 30 equity shares. Each lot of the company will cost Rs 15,000 to the investor.
3. What is the issue size of Tata Technologies IPO and what is the mix of fresh share sale and offer-for-sale (OFS) component?
Ans: Tata Technologies is raising a total of Rs 3,042.51 crore via its initial stake sale, which entirely consists of an offer-for-sale (OFS) component of 6,08,50,278 equity shares with a face value of Rs 2 each. The company is not raising funds via fresh issue and will not receive any proceeds from the IPO.
4. Which investors are participating in the OFS of Tata Technologies IPO?
In the OFS, Tata Motors Ltd, the promoter entity of Tata Technologies is looking to sell up to 4,62,75,000 equity shares, while other selling shareholders Alpha TC Holdings and Tata Capital Growth Fund-I are likely to sell up to 97,16,853 equity shares and 48,58,425 equity shares, respectively, in the IPO.
5. What are the objectives of Tata Technologies IPO?
Since there is no fresh share sale, the company will not receive any funds and entire funds will go to the selling shareholders of the company. The key objectives of the IPO of Tata Technologies are to achieve the benefits of listing the equity shares on the stock exchanges and give a partial or full exit to the selling shareholders.
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6. Is there any reservation for employees or any other category in Tata Technologies IPO?
Tata Technologies has reserved 20,28,342 shares for eligible employees of the company, while 60,85,027 shares or 10 per cent of the offer has been reserved for the shareholders of Tata Motors.
7. Is there any discount for the employee investors or Tata Motors shareholders in Tata Technologies IPO?
No, there is no discount announced so far for employee investors or Tata Motors shareholders. Only shares have been reserved for them. The remaining shares or the offer is considered as the ‘net issue’ by the company.
8. What is the retail portion in Tata Technologies IPO? How much of the portion will go to QIBs and NIIs?
Retail investors will get 35 per cent of the net offer reserved for them. A retail investor can apply for a minimum of one lot or 30 equity shares, amounting to Rs 15,000. At maximum, a retailer can bid for 13 lots or 390 equity shares, amounting to Rs 1,95,000.
Qualified institutional bidders (QIBs) and non-institutional investors (NIIs) will have 50 per cent and 15 per cent allocation in the net offer, respectively. NIIs investors need to bid for a minimum of 14 lots or 420 shares worth Rs 2,10,000 while big NIIs need to apply for a minimum of 67 lots or 2,010 shares, amounting to Rs 10 lakh.
9. What is the business model of IPO-bound Tata Technologies? Who are its key peers of the company?
Incorporated in 1994, Tata Technologies is a global engineering services company by Tata Group, which offers product development and digital solutions. This includes turnkey solutions, to global original equipment manufacturers (OEMs) and their tier-I suppliers. The operation of Tata Technologies is spread globally.
Tata Technologies creates value for customers by assisting them in the development of products that are safer, cleaner and improve the quality of life for the end customers. With deep domain expertise in the automotive industry, it has gained high expertise to serve clients in adjacent industries, such as aerospace, transportation and heavy construction machinery.
The company competes with other ER&D players including KPIT Technologies Ltd, L&T Technology Services Ltd, Cyient DLM Ltd and Tata Elxsi Ltd.
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10. What are the key dates including allotment and listing to remember for Tata Technologies IPO?
Other than the bidding dates, investors should understand that the allotment for Tata Technologies will be rolled out on Tuesday, November 28 as Monday, November 27 is a market holiday. The company is likely to be listed at the bourses on Thursday, November 30.
