Tata Motors to offload 20% stake in the upcoming Tata Technologies IPO

• Tata Technologies has filed an addendum to its DRHP that’s been filed with SEBI.
• Tata Motors will offload 20% of its stake in Tata Technologies via the IPO.
• This is the first Tata Group company to go public in 19 years, after TCS listed in 2004.

One of India’s most awaited public issues, Tata Technologies has filed an addendum to its DRHP that’s been filed with the market regulator. As per the update, its offer for sale component will consist of 95 million shares in its upcoming initial public offer (IPO).

Its parent company, Tata Motors, will sell most of these shares in the OFS segment. It will offload 81 million shares – that’s 20% of the stake it owns in the company. Tata Motors holds over 74% stake in the company.

Alpha TC Holdings will offload 9 million shares accounting to 2.4% of its holdings. Tata Capital Growth Fund I will sell 4.8 million shares representing up 1.20% of its holdings.

No other details like the time of the IPO, its size, price band etc has been revealed yet.

JM Financial, Citigroup Global Markets India, and BofA Securities India are the book running lead managers to the issue.

After a gap of 19 years…

Tata Technologies is the first group company to go public in 19 years. TCS listed on the bourses in 2004.

This year, two other conglomerates – Reliance Industries and JSW also brought their group companies onto the markets. Jio Financial Services listed in late August, while JSW Infrastructure stock debuted in early October.

Tata Technologies is a subsidiary of Tata Motors and is engaged in the business of providing engineering services to original equipment manufacturers (OEMs).

It offers product development and digital solutions, including turnkey solutions, to global OEMs and their tier 1 suppliers.

“The company has deep domain expertise in the automotive industry and leverages this expertise to serve clients in adjacent industries, such as in aerospace and transportation and construction heavy machinery,” the company said in its DRHP.

According to consulting firm Zinnov, global engineering, research and development (ER&D) spending was at approximately $1.64 trillion as of 2021. It expects it to grow to approximately $2.28-2.33 trillion by 2025.

“Tata Technologies has been recognized as a domain expert and leader by Zinnov for several sectors like automotive, aerospace and electrification services,” the company’s DRHP said.