Tata Tech IPO: Issue subscribed 2.6 times on Day 1 so far as investors rush to bid

The initial public offering (IPO) of Tata Technologies saw a strong buying interest from all categories of investors during the initial two hours of the bidding on day one. The Tata Motors promoted engineering company's primary offering kicked off-for subscription on Wednesday, November 22.

Tata Technologies is raising a total of Rs 3,042.51 crore via its initial stake sale in the fixed price band of Rs 475-500 per share in the lot size of 30 equity shares and its multiples thereof. The issue is entirely an offer-for-sale (OFS) of up to 6,08,50,278 equity shares by promoter and other selling shareholders of the company

According to the data, the investors made bids for 11,81,03,730 equity shares, or 2.62 times, compared to the 4,50,29,207 equity shares offered for the subscription by 12.30 pm on Wednesday, November 22. The three-day bidding will conclude for bidding on Friday, November 24.

The portion reserved for retail investors was subscribed 2.45 per cent, while the allocation for shareholders of Tata Motors was booked 2.62 times. The portion for non-institutional investors (NIIs) saw a subscription of 4.37 times. The quota set aside for qualified institutional bidders (QIBs) saw a bidding of 1.98 times, while the employees' portion was booked 52 per cent at the same time.

Majority of the brokerage firms tracking the issue are positive on it and have suggested to subscribe to the issue. They see strong management and promoter background, robust balance sheet, attractive valuations and solid growth potentials in emerging sectors as the key positives for the issue.

Tata Technologies is available at P/E of 28.8 times, which appears to be reasonably priced compared to peers. Its strong brand legacy, extensive automotive expertise, diversified global presence and strategic partnership with industry leaders provide a distinct advantage that aligns well with its growth ambitions, said Geojit Financial Services with a 'subscribe' rating on the issue.

Tata Technologies raised Rs 791 crore from 67 investors through the anchor book as it allocated 1,58,21,071 equity shares at a price of Rs 500 per share. JM Financial, Citigroup Global Markets India and BofA Securities India are the book running lead managers of the IPO, while Link Intime India is the registrar for the issue.

The issue is attractively priced with enough room for upside, said IndSec Research. "We have a 'subscribe' rating to the issue on the back of strong promoter and management pedigree; immense knowledge and experience in the automotive sector; exposure to high growth sectors like aerospace and transportation; global footprint with balanced talent presence and long-standing client relationships."

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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