In the first initial public offering (IPO) by a Tata Group company in nearly two decades, Tata Technologies intends to go public. The IPO includes the sale of up to 9.57 crore equity shares, which accounts for 23.6 percent of the company's paid-up share capital, by Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund I.
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Tata Technologies’ revenue growth and profit growth slowed in FY23 as compared to the previous financial year. The company remains debt-free. Revenue for FY23 grew 25% to Rs 4,418 crore, while profit after tax was up 63% at Rs 708 crore. Over FY21-23, revenue had a compound annual growth rate (CAGR) of 30%, leading to a 46% EBITDA CAGR, and translating to a 61.5% profit after-tax CAGR.
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Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers. The company uses domain expertise in the automotive industry to serve clients in industries such as aerospace, transportation, and heavy machinery.
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Tata Technologies’ revenue CAGR over the last three years has far exceeded that of Tata Elxsi, L&T Technologies and KPIT Technologies. Its EBITDA margin, at 23.7%, remains more or less equal to industry standards.
Pre-issue, the promoter and promoter group held a 76.7 percent stake in Tata Technologies, while the public owned 23.3 percent. After the IPO, the promoter stake will come down to 56.7 percent and that of public will increase to 43.3 percent.
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Tata Technologies’ return on equity (RoE) stood at 19.8 percent in March 2022 and 23.7 percent in March 2023 . The return on capital employed (RoCE) was 19.5 percent in March 2023 compared to 16.7 percent in March 2022.
Nickey Mirchandani NICKEY MIRCHANDANI Assistant Editor at Moneycontrol. She’s a presenter and a stock market enthusiast with over 12 years of experience who loves reading between the lines and scanning through numbers.
