Tata Motors has announced to partially divest its equity shares in Tata Technologies Limited through an initial public offering route.
The Tata group has been for more than 150 years. This group is considered one of the most respected and trusted business groups in India. The Tata group is coming out with an IPO after almost 18 years.
Tata Technologies was founded in the year 1989 as a unit of Tata Motors. Tata Technologies is a global engineering and product development digital services firm that provides services in engineering and design, product lifecycle management, manufacturing, product development, and IT service management to automotive and aerospace equipment manufacturers. It is a subsidiary of Tata Motors. The company is active in North America, the Middle East, Europe, & the Asia Pacific region.
Tata Technologies IPO is expected to be one of the most popular in recent years, and that’s why it is getting so much attention and hype. Tata Technologies will raise somewhere between Rs 35-40 billion (bn), giving it a valuation of Rs 162-200 bn.
Tata Technologies IPO will allow the company to raise capital from the public. It can be used to fund expansion and growth plans. It will provide an opportunity for the public to invest in the company. This IPO is seen as a sign of confidence in the company’s future prospects.
This IPO of Tata Technologies will be subject to applicable approvals, market conditions, regulatory clearances & certain other considerations. The management of Tata Technologies will make further announcements of all material developments relating to IPO as per the market regulator’s regulations.
The proceeds from the IPO will help the reeling automaker recover its losses. The IPO might turn out to be one of the much-needed moves for Tata Motors as the company has reported losses for the last seven quarters consistently.
Tata Technologies expects to grow by 20% in the next 12 months and at a compounded annual growth rate (CAGR) of 15% the year after that. Tata Technologies can grow its business to over US$ 800 million organically, by 2025. This is a growth of 69% from the turnover reported in the financial year 2021-22.
The company has an active list of targets for aiming at inorganic growth. Tata Technologies is also expecting growth through mergers and acquisitions. Tata Technologies is planning to leverage its hold on electric vehicles. The company is also looking forward to benefiting from the digital boom in the automotive and aviation space.
Tata Technologies has tied up with GKN Automotive. They are the global leader in driveline systems & advanced e-Powertrain technologies.
The tie-up of Tata Technologies with GKN is like an endorsement from the entire market as 50% of EVs sold globally have some parts consisting of GKN. Tata Technologies is developing software and embedded electronics as part of the tie-up.
Tata Technologies is moving towards growth after taking into consideration the financial performance and prospects of the company.
We have mentioned 5 points about Tata Technologies IPO which you should know before they launch their IPO. We have given a detailed explanation of Tata Technologies IPO in the video.