Ahead of the launch of its initial public offering (IPO), Tata Technologies is reportedly in talks with Morgan Stanley Investment Management, Blackrock, and some US hedge funds to invest in the stock launch at a valuation of $2.5 billion, news agency Reuters reported citing two sources privy to the development.
Tata Technologies, which is part of the Tata Group, provides engineering services to firms across various sectors, including auto and aerospace. With the $350-375 million IPO, Tata Tech will be the first Tata Group company to launch an IPO in two decades.
Apart from Blackrock and Morgan Stanley, Tata Tech is reportedly also in touch with US asset managers Ghisallo Capital, Oaktree Capital, and Key Square Capital for possible IPO investment. The purported investors have not released any statement confirming the development.
These funds are believed to be interested in Tata’s anchor book, where high-profile institutional investors are allotted shares before the subscription opens for retail and other investors.
“Big investors are quite excited by the Tata brand, and a profitable company with scale, that's driving demand,” one source was quoted as saying.
The talks are assessing Tata Technologies’ valuation to be $2.5 billion now, around 25 percent higher than last month when TPG picked up a 9.9 percent stake in pre-IPO fundraising.
The Tata Technologies IPO is expected to open for subscriptions around November 21. Investors and market experts are looking with huge optimism at the IPO as it can be one of India's biggest IPOs this year after Mankind and Blackstone-owned Nexus Malls.
The company is planning to make its trading debut by late November.
For nine months of duration till December 31, 2022, Tata Technologies' profit increased by 23 percent to Rs 4.07 billion. Its total income increased by 15 percent to Rs 30.5 billion, according to its draft paper submitted in March.
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