Tata Technologies IPO: Ever since Tata Technologies Ltd filed papers for launching its initial public offering IPO), stock market observers have been busy evaluating impact of Tata Technologies IPO on Tata Motors. In this upcoming IPO, Tata Motors intends to sell 8,11,33,706 Tata Technologies shares that auto major had acquired at ₹7.40 per share (as written in the Draft Red Herring paper or DRHP). Experts are highly bullish on both Tata Motors shares and Tata Technologies IPO. They said that market is expecting the public issue in next two to three months and even though its price band is not announced, market is expecting whopping benefit for Tata Motors as it acquired Tata Technologies shares at paltry ₹7.40 apiece levels.
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Stock market experts advised retail investors, who wish to apply for Tata Technologies IPO, to start accumulating Tata Motors share as the auto stock is expected to remain in uptrend in near term.
On how Tata Technologies IPO will impact Tata Motors share price, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Tata Technologies IPO is expected to do well as the public issue has a backing of big brand Tata. The public issue would bring cash flow in Tata Motors that is expected to improve margins and balance sheet of the auto company. As Tata Technologies Ltd is an IT company, it seems that it was completely an investment of the surplus amount available at Tata Motors when it acquired Tata Technologies shares. So, Tata Technologies IPO should be seen as profit booking by Tata Motors.” He said that Tata Motors has reported strong Q3 numbers in FY23 and it is expected to give attractive Q4 numbers as well.
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How Tata Technologies IPO will benefit TaMo
Gorakshkar said that Tata Technologies is yet to fix IPO price but it’s for sure that Tata Technologies IPO price would be at least 4-5 times of the rate at which Tata Motors acquired stake in Tata Technologies. So, Tata Motors is expected to reap huge benefit from Tata Technologies IPO, said Avinash Gorakshkar.
Tata Technologies IPO valuation
Explaining how Tata Technologies IPO is a win win situation for Tata Motors shareholders, Anuj Gupta, Vice President — Research at IIFL Securities said, “Tata Technologies IPO may unlock values for Tata Motors shareholders.” He said that Tata Technologies is yet to announce IPO price but it’s for sure that its market cap would be around ₹18,000 crore to ₹20,000 crore and on the basis of that we can expect Tata Technologies IPO price around ₹40 per equity share.
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Benefit for Tata Motors shareholders from upcoming IPO
Avinash Gorakshkar advised stock market investors to start accumulating Tata Motors shares from now as the auto stock is expected to benefit from recent global triggers like US Fed flagging off concern on looming economic slowdown in US due to bank crisis, falling US dollar rates and Dollar Index easing to the tune of 101. Gorakshkar said that falling US dollar may force FIIs to look at emerging markets that includes Indian stock market as well. As Tata Motors is a FII and mutual fund favourite stock, it is expected to get benefit of latest stock market triggers as well.
So, both short term sentiments and fundamental developments like Tata Technologies IPO and quarterly results are signaling uptrend in Tata Motors shares.
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Advising positional investors to buy Tata Motors shares, Sumeet Bagadia, Executive Director at Choice Broking said, “Tata Motors has given fresh breakout at ₹460 per share levels on closing basis and the stock is looking highly bullish on chart pattern. One can buy the stock at current levels for near term target of ₹490 to ₹500 apiece levels maintaining stop loss at ₹450 apiece levels.”
For those who have Tata Motors shares in their stock portfolio, Sumeet Bagadia said, “Those who have Tata Motors shares in portfolio can upgrade their trailing stop loss at ₹450 and hold for ₹490 to ₹500 per share target.”
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Officenewz We advise investors to check with certified experts before taking any investment decisions.
