After receiving an amazing response to the IPO from across categories of investors last week, all eyes will now be on the share allotment by Tata Technologies, the subsidiary of Tata Motors. The company is expected to finalise the basis of allotment of IPO shares by November 28.
The first IPO by the Tata Group in last more than 19 years was subscribed 69.4 times during November 22-24 with investors buying 312.65 crore equity shares against offer size of 4.5 crore shares. Overall, they bid for Rs 1.56 lakh crore worth shares in three days.
Amongst them, qualified institutional buyers and high net-worth individuals looked aggressive, buying 203.41 times and 62.11 times their allotted quota, while the portions set aside for retail investors, Tata Technologies' employees and Tata Motors' shareholders were subscribed 16.50 times, 3.7 times and 29.2 times, respectively.
The global engineering services company has raised Rs 3,042.51 crore via public issue, at Rs 500 per share, the upper price band. The IPO comprises only an offer-for-sale by promoter Tata Motors, and investors Alpha TC Holdings, and Tata Capital Growth Fund I.
The price band for the offer was Rs 475-500 per share.
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Investors can check the shares allotment status either on the BSE website, or the portal of IPO registrar (Link Intime India) by following three easy steps.
On the BSE website,
a) Investors have to select 'equity' and 'issue name' (Tata Technologies Limited) in the dropdown,
b) Enter either 'application number' or 'PAN number'
c) Check box 'I am not a robot', and finally click on 'search button.
On the IPO registrar portal,
a) Select 'Tata Technologies Limited - IPO' in the dropdown,
b) Select and accordingly enter either 'PAN number', or 'application number', or 'DP Client ID'
c) Finally click on 'search' button
The equity shares are expected to be credited to the demat accounts of successful investors by November 29, while the much-awaited trading in shares is likely to commence on the BSE & NSE with effect from November 30. These are tentative dates, which may change.
Also read - IREDA IPO | Here is how to check the share allotment status, know listing date, grey market premium
Its IPO shares seem to be getting healthy response in the grey market too. In fact, the premium has been increased by around 10 percent in the last few sessions. Shares were available at a premium of 80 percent over the issue price of Rs 500 per share in the grey market, at the time of writing this article. It was quoted at a 70 percent premium before the opening IPO for subscription.
The grey market is an unofficial platform wherein IPO shares can be bought and sold till the listing. Generally, the participants look at grey market premium to know the expected listing price of any IPO, though it does not cover the fundamentals of the company.
The strong appetite for the Tata Group firm, which reflected in the subscription numbers, strong parentage, healthy financials, attractive valuations and expected growth potential in the engineering services space can be major reasons behind the robust listing expectations.
Tata Technologies shares were available at a P/E of 32.5x on the basis of FY23 financials, which is lower compared to peers KPIT Technologies (105.6x), L&T Technology Services (41.2x) and Tata Elxsi (69.6x)
On the financials front, the Pune-based product development and digital solutions company reported revenue growth at a CAGR of 36 percent during FY21-FY23 largely led by services segment, while profit after tax grew at a CAGR of 62 percent and EBITDA (earnings before interest, tax, depreciation and amortisation) increased at a CAGR of 62 percent during the same period, driven by strong operating leverage.
Even its margin performance was very strong with the EBITDA margin expanding 240 bps and profit margin 410 bps during FY21-FY23.
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