Tata Technologies' IPO, valued at Rs 3,042.51 crores, is a book-built offering comprising an offer for sale of 6.09 crore shares.

The bidding for Tata Technologies IPO commenced on November 22, 2023, concluding on November 24, 2023. The allotment process was completed by Tuesday, November 28, 2023. Subsequently, the shares were officially listed on both the BSE and NSE on November 30, 2023.

Tata Technologies' IPO price range is ₹475 to ₹500 per share, with a minimum lot size of 30 shares. Retail investors must invest a minimum of ₹15,000. For sNII, the minimum investment is 14 lots (420 shares), totaling ₹210,000, while bNII requires a minimum investment of 67 lots (2,010 shares), amounting to ₹1,005,000.

JM Financial Limited, Citigroup Global Markets India Private Limited, and BofA Securities India Limited serve as the book running lead managers for the Tata Technologies IPO. Meanwhile, Link Intime India Private Ltd has been appointed as the registrar overseeing the issue.

Objective of IPO.

The issue is completely “offer for sale”

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About TATA TECHNOLOGY Limited

A leading global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (“OEMs”) and their tier 1 suppliers.

The company helps in developing products that are safer, cleaner and improve the quality of life for end-customers. They are a pure-play manufacturing focused ER&D company, primarily focused on the automotive industry and currently engaged with seven out of the top 10 automotive ER&D spenders. Other clients in adjacent industries, such as in aerospace and transportation and construction heavy machinery (“TCHM”).

The company leverages its deep manufacturing domain knowledge to deliver value-added services to their clients in support of their digital transformation initiatives including product development, manufacturing, and customer experience management.

Primary categories of business as follows:

Services: Includes providing outsourced engineering services and digital transformation services to global manufacturing clients helping them conceive, design, develop and deliver better products. 

Technology Solutions: Products and Education businesses (collectively, “Technology Solutions”). Through Products business company resell third-party software applications, primarily product lifecycle management (“PLM”) software and solutions and provide value-added services such as consulting, implementation, systems integration and support.

On the other hand, Education business provides “phygital” education solutions in manufacturing skills including upskilling and reskilling in relation to the latest engineering and manufacturing technologies to public sector institutions and private institutions and enterprises through curriculum development and competency center offerings through proprietary iGetIT platform.

Competitors:

ER&D service: L&T Technology Services, KPIT Technologies and Tata Elxsi,

IT service: Tata Consulting Services (“TCS”), Wipro and Tech Mahindra

Global engineering, research and development (“ER&D”) spend to be approximately $1.81 trillion as of 2022 and expects it to grow to approximately $2.67 trillion by 2026. The ER&D spend outsourced to third-party service providers reached $105 billion to $110 billion in 2022 and is anticipated to grow at a 11-13% compound annual growth rate (“CAGR”) between 2022 and 2026.

Key growth drivers: Increasing propensity to outsource services (following the COVID-19 pandemic), increased regulatory interventions for safer and cleaner products, shrinking product innovation cycles and next-generation product technologies that underpin autonomous, connected, electrification and shared (“ACES”) technologies.

Risk Analysis.

1. Tata Motors Limited, Jaguar Land Rover Limited and their subsidiaries hold about 75% of its revenue. These revenues are highly concentrated in the automotive segment, also approximately 75% of revenue is concentrated to 3 countries India, Europe, and North America.
2. The company expects a significant amount of future revenue to come from new energy vehicle companies, many of whom may be startup companies. Uncertainties in funding plans, future product roadmaps, ability to manage growth, creditworthiness and ownership changes may adversely affect tata Technologies’ business, financial condition, and results of operations.
3. The company invests in unsecured debt instruments, from time to time, which may carry interest rates lower than the market rate. Sometimes the company also incurs exchange rates risks.
4. The company is subject to laws, rules and regulations related to system failures, disclosure of confidential information or data security breaches that are frequently evolving and may require additional expenses.
5. Certain Group Companies operate in a similar line of business, which may lead to competition with these entities and could potentially result in a loss of business opportunity for this Company.
6. The company has recently entered the education business, therefore might take time to grow. Apart from this, the company also needs to innovate and upgrade and adapt our services and solutions to evolving clients.
7. For Products business they rely on vendors and partners for software, many of which are single-source or limited source suppliers.
8. clients may terminate contracts before completion, negotiate adverse terms of the contract or choose not to renew contracts, which could materially adversely affect.
9. The company rely on licensing arrangements with Tata Sons Private Limited to use the “Tata” brand.
10. The company is subject to laws and regulations in the United States and other countries in which they operate concerning operations, including export restrictions, U.S. economic sanctions, the Foreign Corrupt Practices Act, and similar anti-bribery laws.