In a remarkable turn of events, a Tata group subsidiary is poised to make its debut on the Indian stock market after a hiatus of nearly 19 years. The spotlight falls on Tata Technologies Ltd, a subsidiary of Tata Motors, as it garners approval from the market regulator SEBI (Securities and Exchange Board of India) for its IPO (Initial Public Offering). As a big update Yaya will reserve a part of the shares for Tata Motors employees.
The investment community on Dalal Street is abuzz with anticipation, eagerly awaiting the opening date for subscription to the Tata Technologies IPO. Market experts speculate that this much-awaited event might unfold by the end of August 2023 or in mid-September 2023, indicating that the IPO subscription could commence within the next month.
In the wake of SEBI’s nod for the Tata Technologies IPO launch, the grey market has sprung to life with signals regarding this upcoming public issue, which is characterized as a complete Offer for Sale (OFS). Market observers have noted that shares of Tata Technologies Ltd are trading in the grey market at a premium of ₹105 as of today.
All About the Tata Technologies IPO
As of August 12, the grey market premium (GMP) for the Tata Technologies IPO stands at ₹105, a noteworthy increase from its GMP of ₹89 last week. This remarkable surge in GMP despite the week’s subdued stock market sentiment underscores the considerable enthusiasm investors have displayed for this unlisted Tata group entity in the grey market.
When contemplating the potential IPO price for Tata Technologies, industry expert Anuj Gupta draws a comparison with its peer Cyient. Based on such a comparison, Tata Technologies’ market capitalization could be approximately ₹12,000 crores. With the company planning to list 405,668,530 shares on Indian exchanges, the projected IPO price for Tata Technologies hovers around ₹295.
However, Gupta acknowledges the strategic practice of offering stocks at a discounted rate (around 10-15%) to entice investors. In this light, the potential IPO price could range from ₹265 to ₹270 per equity share. Yet, in pursuit of a robust investor response, companies sometimes adopt higher valuations, leading to a higher IPO price of around ₹315 to ₹320 per equity share for Tata Technologies.
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