Tata Technologies IPO GMP (Grey Market Premium)

Tata Technologies IPO will be one of the most sought after IPOs of the year. While the dates of the IPO and the indicative price band for the IPO is yet to be announced, it has generated a lot of excitement in the market. Firstly, it is a high tech issue and has few peer players in the market. Secondly, Tata Technologies will be the first IPO from the Tata group in the last 19 years. In fact, the last IPO from the Tata fold was Tata Consultancy Services (TCS), which came out with its IPO in the year 2004. So, this will be a Tata group IPO after a full 19 years and there is obviously a lot of excitement and euphoria built around it.

What exactly does the IPO entail? The IPO will entirely be an offer for sale by the promoters with Tata Motors being the predominant seller in the IPO. There is no fresh issue component to the IPO. Tata Technologies IPO will comprise of an offer for sale (OFS) of 9,57,08,984 shares (9.57 crore shares) with each share having a face value of ₹2 per share. Since the price band of the IPO has not been announced, we do not know the size of the IPO at this point of time, but that is expected during this week.

Here is how Tata Technologies proposes to allocate the IPO across different categories of investors.

The promoter group of the company currently holds 76.69% of the equity of the company and while there will be no dilution of overall equity due to it being an OFS, it will certainly reduce the holding of the promoters to 53.10% post the IPO.

Financial highlights of Tata Technologies Ltd

Here are some basic points to remember on the financials of Tata Technologies Ltd ahead of the public issue.

• For the financial year ended FY22, the company reported total revenues of ₹3,578.38 crore, which represents a growth of 47.52% over the previous financial year.
• For the financial year ended FY22, the company reported Net Profits of ₹436.99 crore, which represents a growth of 82.71% over the previous financial year.
• For FY22, the company reported net profit margins of 12.21% which compares favourably with the net profit margins of 6.69% in the previous year FY21.
   
• For FY22, the company reported asset turnover ratio of 0.85X which compares favourably with the asset turnover ratio of 0.68X in the previous year FY21.

GMP story of Tata Technologies Ltd

Interestingly, even ahead of the price announcement and the date announcement the IPO of Tata Technologies has been trading actively in the grey market for quite some time. This GMP is based on assumptions on the likely IPO price based on what could be the tentative IPO price based on the peer group valuation comparisons. Here is how the Weekly GMP has panned out. We have only covered the continuous GMP since 28th June 2023.