Tata Motors-led subsidiary Tata Technologies plans mega IPO: Report

8 Jul 2022 , 02:00 PM

Tata Motors-led subsidiary Tata Technologies, a global product engineering and digital services company, has initiated preliminary steps to evaluate an initial public offer (IPO) on the back of accelerated demand in the electric vehicles zone and the aviation segment, industry sources related to the matter told to "Moneycontrol".

As per the report, If the plan came into process, it would arguably be the first IPO from the diversified conglomerate since tech behemoth TCS in 2004 and also the first under the tenure of Tata Group chairman N Chandrasekaran who took over in January 2017, said the report. To be sure, Tata Autocomp Systems shelved a $260 mn IPO in 2011 and Tata Sky ( now Tata Play) is also weighing a listing, according to reports.

"The IPO process for Tata Technologies kicked off recently and investment bank Citi is on board. These are early days for the deal and there is no clarity yet on the proposed issue size or structure," said one of the persons known to this matter.

On the condition of anonymity, it is said that documentation work had begun on the IPO and that more domestic and foreign banks were likely to be added at a later stage.

Tata Motors holds little more than 74% stake in Tata Technologies, according to the former’s 2022 annual report.

The foundation of Tata Technologies is the Legacy of Trust that is the hallmark of the Tata group.

The Company earned total revenue from its operations of Rs3,529.57 crore during financial year 2021-22 compared to Rs2,380.91 crore in financial year 2020-21.

Furthermore, the Profit after Taxes (PAT) increased by 82.7% to Rs436.97 crore in 2021-22 from Rs239.18 crore during financial year 2020-21. PAT as a percentage to total income increased to 12.2% in financial year 2021-22 from 9.9% in financial year 2020-21.