Highlights:
- Tata Technologies, a subsidiary of Tata Motors, has submitted draught documents to SEBI signalling its intention to go public through an IPO.
- Tata Motors, the company’s promoter, and two other current shareholders will make an offer for sale (OFS) in the IPO.
- Tata Technologies serves the automotive, aerospace, and other industries, and its consolidated profit climbed by 23% to Rs 407 crore in the nine months ending December 31.
On Thursday, Tata Technologies, a subsidiary of Tata Motors, submitted draft documents to the Securities and Exchange Board of India (SEBI) indicating their intention to go public via an initial public offering (IPO).
According to the draft papers, the IPO will be entirely an offer-for-sale (OFS) by the company’s promoter, Tata Motors, and two other current shareholders. The public offering will not include any new share issuances.
Tata Motors announced in a filing with the stock exchange that its subsidiary, Tata Technologies Limited, has submitted a draft red herring prospectus to the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) through an offer for sale.
The filing reads, “We wish to inform you that Tata Technologies Limited (“Tata Technologies”), a subsidiary of Tata Motors Limited (“the Company”), has informed the Company that it has today filed a draft red herring prospectus dated March 9, 2023 with the Securities and Exchange Board of India for an initial public offering by way of an offer for sale.”
The offer for sale involves 957, 089, 84 shares for cash, equivalent to roughly 23.60% of the paid-up share capital.
According to Tata Motors, the initial public offering is an offer-for-sale consisting of three components: A) Tata Motors Limited will offer up to 81,133,706 equity shares, representing up to 20% of Tata Technologies’ paid-up share capital, B) Alpha TC Holdings Pte Ltd. will offer up to 9,716,853 equity shares, equivalent to 2.40% of paid-up share capital, and C) Tata Capital Growth Fund 1 will offer up to 4,858,425 equity shares, representing 1.20% of paid-up share capital.
Tata Motors has a majority stake of over 74% in Tata Technologies, with Singapore-based investment firm Alpha TC Holdings Pte Ltd, managed by Tata Capital Advisors, holding almost 9% of the company. In addition, Tata Capital Growth Fund owns a 4.48% stake.
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Tata Technologies serves the automotive, aerospace, and other industries, and according to the company, its consolidated profit grew by 23% to Rs 407 crore in the nine months ending December 31, with revenue increasing by 15.5% to Rs 3,012 crore.
Tata Technologies cited a report by Zinnov Management Consulting, which projected that digital service spending in the automotive, aerospace, and related industries would increase from $1.64 trillion in 2021 to $2.28-2.33 trillion by 2025.
In December, Tata Motors was reportedly considering a public offering to sell a portion of its stake in Tata Technologies. JM Financial, Citigroup Global Markets, and BofA Securities are the book-running lead managers for the issue.
