Tata Tech shares crash 8% amid profit booking; m-cap slips below Rs 50,000 crore mark

Shares of Tata Technologies Ltd tumbled about 8 per cent during the early trading session on Friday as traders looked to book profit in the Tata Group's latest debutant on Dalal Street. The stock dropped sharply during its second trading session and headed towards its listing price.

Tata Tech shares dropped 8 per cent to Rs 1,212.80 on Friday, compared to its close at Rs 1,3,14.25 on Thursday, its maiden trading session. The total market capitalization dropped below Rs 50,000 crore mark. However, they made a marginal recovery and reclaimed Rs 50,000 crore m-cap mark.

Tata Technologies made its debut at Dalal Street on Thursday as the Tata Group led firm was listed at Rs 1,200 per shares, a premium of 140 per cent over its issue price at Rs 500. The stock surged another 17 per cent to Rs 1,400, taking the overall gains to 180 per cent over the issue price.

Tata Technologies shares more than doubled in its trading debut, with the surge putting the company on track to deliver the best listing gains ever for any Indian initial public offering of comparable size, said Amit Goel, Co-Founder & Chief Global Strategist at Pace 360.

Tata Tech's valuation appears to be comparable to its peers. We believe that these valuations are not sustainable, and we would recommend booking profits on the counter over the next couple of weeks. For long term investors we believe that there would be better entry points in the next 5-6 months when this stock could be available at cheaper valuations, he suggested.

Also read: Tata Tech IPO allotment in next few hours, GMP stays firm; here's what to expect

Tata Technologies was the first IPO by the renowned Tata Group in nearly two decades. The homegrown conglomerate previously launched the initial public offer of India's largest software exporter Tata Consultancy Services in the year 2004.

To recall, Tata Technologies sold its IPO in the range of Rs 475-500 apiece with a lot size of 30 shares. The issue was open for bidding between November 22 and November 24 to raise a total of Rs 3,042.51 crore, which was entirely an offer for sale by the promoter and other selling shareholders of the company.

The issue saw a huge demand across all the categories of investors and attached 73,58,222 bids worth more than Rs 1 lakh crore and commanding an overall subscription of 69.43 times, thanks robust bidding by qualified institutional bidders (QIBs), whose portion was subscribed a stellar 203.41 times.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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