Tata Technologies IPO Day 2: Check latest GMP, subscription status, other details. Should you apply?

Tata Technologies IPO: The initial public offering (IPO) of Tata Technologies has sailed through on the first day of the bidding as the issue got oversubscribed heavily within hours of opening. Tata Technologies IPO opened for subscription on November 22 and will remain open till November 24.

Investors’ enthusiasm over Tata Technologies IPO is heightened as it is the first IPO from the Tata Group in nearly two decades.

Also Read: Tata Technologies IPO open for subscription: GMP, issue details, 10 key things to know before you invest

Tata Technologies is a subsidiary of automobile major Tata Motors and is a pure-play manufacturing focused Engineering Research & Development (ER&D) company, primarily focused on the automotive industry.

Tata Technologies IPO issue size is ₹3,042.51 crore which is entirely an offer for sale (OFS) of 6.09 crore equity shares by the promoter and investors. The IPO price band has been set at ₹475 to ₹500 per share.

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Promoter Tata Motors will offload 4.62 crore equity shares worth ₹2,313.75 crore in the OFS, while investors Alpha TC Holdings Pte Ltd will sell 97.17 lakh shares and Tata Capital Growth Fund I will offload 48.58 lakh shares in the Tata Technologies IPO.

Should you subscribe Tata Technologies IPO?

Most analysts have advised subscribing to the Tata Technologies IPO because of the company’s improving financials, strong brand legacy and reasonable valuations.

Brokerage firm Motilal Oswal Financial Services said it likes Tata Technologies and recommended ‘Subscribe’ given its niche presence, strong parentage and strategic partnership with marquee clients. 

“This along with Tata Tech’s focus on diversifying its offerings and clients, puts it in a sweet spot to tap huge outsourcing opportunities in ER&D space. The IPO is attractively priced at 29x 1HFY24 P/E (on an annualized basis) which is at a discount to its peers. Tata Group is coming with an IPO after a gap of 19 years, catching investors fancy and hence could see listing gains as well,” said Motilal Oswal Financial Services.

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Tata Technologies provides a diverse range of services encompassing IT consultancy, SAP implementation, and CAD/CAM engineering and design consultancy. 

“Robust earnings growth is anticipated moving forward. Tata Technologies has outpaced Tata Elxsi, L&T Technologies, and KPIT Technologies in revenue CAGR over the last three years. At an upper band valuation of ₹500, the issue is valued at a PE ratio of 32.5x based on FY23 EPS. We recommend subscribing to the issue for both short-term listing gains as well as long-term investment prospects,” said Arihant Capital Markets.

Geojit Financial Services also believes that at the upper price band of ₹500, Tata Technologies is available at P/E of 28.8x (FY24E annualised EPS), which appears to be reasonably priced compared to peers. 

“Its strong brand legacy, extensive automotive expertise, diversified global presence and strategic partnership with industry leaders provide a distinct advantage that aligns well with its growth ambitions. Hence, we assign a “Subscribe” rating on a medium to long-term basis,” said the brokerage firm.

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Tata Technologies IPO GMP today

Tata Technologies IPO GMP today, or grey market premium today, is ₹395 per share, which is 79% higher than the issue price, market observers said.

This indicates that the Tata Technologies shares are trading at a premium of 79% at ₹895 apiece in the grey market.

Tata Technologies IPO Subscription Status

Tata Technologies IPO has been subscribed 14.86 times so far on day 2 as the issue received bids for 66,92,39,790 equity shares as against 4.50 crore shares on the offer, as per data available on BSE.

The public issue has been subscribed 11.20 times in the retail category and 8.55 times in the Qualified Institutional Investors' (QIB) category, while the Non-Institutional Investors' (NII) portion has been booked 31.04 times.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.