Tata Technologies IPO Review : Apply or Not?

Tata Technologies IPO Review : Tata Technologies Ltd. (TTL), a subsidiary of Tata Motors Limited, is set to make its debut in the stock market through an Offer for Sale (OFS). This IPO has generated significant interest among investors, considering the Tata Group’s reputation and TTL’s strong presence in the Engineering, Research, and Development (ER&D) sector. In this comprehensive review, we will delve into the company’s background, financial performance, and key investment considerations to help you decide whether to apply for Tata Technologies IPO.

Also See: Tata Technologies IPO GMP

"Exciting news! Stockesta is now on WhatsApp and Telegram Channels πŸš€ Subscribe today | Stay updated with the latest IPO insights!" Follow on Whatsapp! and Join Telegram!

About Tata Technologies Ltd.:

Tata Tech is a global engineering services company that specializes in offering product development and digital solutions to original equipment manufacturers (OEMs) and their tier 1 suppliers. The company’s primary focus is on the automotive industry, but it also serves clients in adjacent sectors such as aerospace, transportation, and construction heavy machinery. With a diverse team of experts from around the world, Tata Technologies collaborates to solve complex engineering problems for its clients.

Also Read: How to Buy for Tata Technologies IPO online

Tata Tech IPO Details and Capital History:

The IPO consists of 60,850,278 equity shares with a price band of Rs. 475 to Rs. 500 per share, aiming to raise Rs. 3,042.51 crores at the upper end of the price range. The issue opens on November 22, 2023, and closes on November 24, 2023. This OFS does not involve raising funds for the company but provides an exit opportunity for Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund.

Also Read: Tata Technologies Limited IPO Detail

Tata Tech historical capital history reveals that the company initially issued equity shares at par value and later at various price points between Rs. 5 and Rs. 129. Additionally, it issued bonus shares in the ratio of 1 for 1 in January 2023. The promoters and selling stakeholders hold shares with an average cost of acquisition of Rs. 7.40 and Rs. 25.10 per share.

Tata Tech Financial Performance:

TTL’s financial performance over the last three fiscal years has shown consistent growth. In FY21, it posted a total income of Rs. 2,425.74 crores and a net profit of Rs. 239.17 crores. These figures increased to Rs. 3,578.38 crores and Rs. 437.00 crores, respectively, in FY22 and further to Rs. 4,501.93 crores and Rs. 624.04 crores, respectively, in FY23. For H1 of FY24 ending on September 30, 2023, the company reported a net profit of Rs. 351.90 crores on a total income of Rs. 2,587.42 crores. (See TATA TECH Financial Charts)

The company has maintained an average earnings per share (EPS) of Rs. 12.26 and an average Return on Net Worth (RoNW) of 18.68% over the last three fiscal years. The IPO is reasonably priced, with a Price-to-Earnings (P/E) ratio of 28.82 when annualized FY24 earnings are considered.

Tata Tech Dividend Policy:

Tata Technologies has a dividend policy in place, and it paid a dividend of 615% for FY23. The company’s dividend policy is based on its financial performance and future prospects.

Comparison with Listed Peers:

Tata Technologies’ listed peers include KPIT Techno, L&T Technology Services, and Tata Elxsi. While these companies operate in similar sectors, they may not be directly comparable due to differences in size and business focus. However, it’s worth noting that Tata Technologies’ P/E ratio of 32x is relatively favorable compared to its peers.

Tata Tech Investment Rationale:

Several factors make Tata Tech an attractive investment opportunity:

  1. Deep expertise in the automotive industry.
  2. Robust strategy and healthy margin expansion.
  3. A balanced mix of anchor clients, traditional OEMs, and new energy vehicle companies.
  4. Strong presence in the ER&D sector, positioning it as a leader in various domains.

Tata Tech IPO Grey Market Premium:

The grey market premium (GMP) for Tata Technologies IPO has been reported in the range of Rs. 340 to Rs. 350, indicating strong demand in the unregulated market. (See Current TATA Tech IPO GMP)

Tata Tech IPO Strengths and Weaknesses:

Strengths:

  1. Extensive expertise in the automotive industry.
  2. Comprehensive solutions for electric vehicle (EV) development, manufacturing, and post-sales support.
  3. Robust digital capabilities strengthened by unique tools.
  4. Diverse global presence and collaborations with major manufacturing enterprises.

Weaknesses:

  1. Dependence on a few top customers.
  2. Heavy reliance on the automotive industry, which can be affected by market fluctuations and trends in electric cars.

Also Read: Tata Technologies IPO Strengths and Risks

Should You Apply Tata Technologies IPO?

After considering the aforementioned factors and analyzing various financial metrics, our financial team suggests that Tata Technologies IPO offers a promising investment opportunity. The company’s strong financial performance, favorable industry outlook, and global footprint make it an attractive proposition for investors with a long-term investment horizon.

Other Financial Platform View on TATA Tech IPO

Disclaimer: The information provided in this response is for informational purposes only and should not be construed as financial advice. It is based on publicly available information and our financial team’s analysis. Past performance is not necessarily indicative of future results, and there is no guarantee that investing in Tata Technologies IPO will generate positive returns. Investment decisions should be made based on individual risk tolerance, investment goals, and overall financial situation. It is strongly recommended to consult with a qualified financial advisor before making any investment decisions.

Tata Technologies IPO GMP

Conclusion:

Investors often look favorably upon Tata Group companies, known for their reliability and strong track record. Tata Technologies IPO presents an opportunity to invest in a company with a robust financial performance, deep industry expertise, and a solid growth strategy. Considering the reasonable valuation, diverse client base, and the company’s potential for future growth, this IPO seems promising. However, as with any investment, it’s essential to conduct your own research and consult with financial experts before making a decision. Investors looking for medium to long-term rewards may find Tata Technologies a compelling addition to their portfolio.

"Exciting news! Stockesta is now on WhatsApp Channels πŸš€ Subscribe today by clicking the link and stay updated with the latest IPO insights!" Click here!

πŸ‘‰ IPO GMP || IPO News || IPO Details || IPO Review || Join Whatsapp Channel and read news related to IPO on Stockesta.com.
Disclaimer: The information provided on this website is for informational purposes only and should not be construed as financial or investment advice. Users are advised to do their own research and consult a qualified financial advisor before making any investment decisions.
What is an IPO?- Why Companies Go Public