Mumbai: Tata AutoComp Systems Ltd, the Tata group company that makes automobile parts, plans to raise Rs 750 crore by selling shares to the public for the first time in June to expand its operations and cut debt, chief executive R.S. Thakur said.
The initial share sale will be followed by the sale of the company’s shares in the open market by Tata group companies including Tata Motors Ltd, Tata Sons, Tata Industries and Tata Capital Ltd to help the group raise Rs 350 crore, said Thakur. The Tata group will own 60% of the company after the IPO.
Analysts said the current volatility in the stock markets may impact valuations. “The timing of the IPO is not good,” said Umesh Karne, analyst at brokerage Brics Securities Ltd. “Shares of most auto and auto part firms have been trading at low prices.”
The automobile parts maker has appointed JM Financial Consultants Pvt. Ltd, Tata Capital Markets Ltd and JP Morgan India Pvt. Ltd as advisers to the sale.
“Once we get listed, the scrutiny by the investor community will spur the performance of the company,” Thakur said.
Tata AutoComp plans to double its revenue by 2015 and set up research and development centres in India in collaboration with its joint venture partners.
Tata AutoComp’s consolidated revenue in fiscal 2011 was Rs 2,900 crore. The company has 47 manufacturing units across the country and has joint ventures with 12 global component makers.
Supplies of auto parts to Tata Motors Ltd accounts for almost half of the company’s revenue. Its other clients include Ashok Leyland Ltd, Toyota Kirloskar Motors Pvt. Ltd, BMW India Pvt Ltd, Fiat India Automobiles Ltd and Force Motors Ltd