Tata Technologies: Ipo Valuations, share price in the grey market
Ever since Tata Technologies — India’s 15th largest IT company — filed a DRHP (Draught Red Herring Prospectus) with market regulator Securities and Exchange Board of India (SEBI) for the launch of its initial public offering (IPO), market observers and Tata Motors shareholders have been busy counting the benefit that this value unlocking will bring to the Indian auto major’s balance sheet.
According to the Tata Technologies DRHP, Tata Motors purchased Tata Technologies shares for $7.40 per share, and the market capitalization of Tata Technologies is expected to be around $18,000 to 20,000 crore, which means one share of Tata Technologies would cost around $500, resulting in a 6,650% increase in Tata Motors investment in Tata Technologies Ltd. Meanwhile, grey market is also bullish on Tata Technologies IPO. According to market observers, Tata Technologies share price is trading around ₹830 per equity share.
Tata Tech. is a Tata group company that provides technical services in a variety of industries, including engineering and design, product lifecycle management, manufacturing, product development, automotive, and aerospace.
Tata Technologies share price On Tear: Research Report
Tata Technologies IPO valuations
Anuj Gupta, Vice President — Research at IIFL Securities, stated, “Tata Technologies Ltd market cap is expected to be around 18,000 to 20,000 crore and the public issue is going to help balance sheet of the Tata Motors to a greater extent and it would be value unlocking by the auto major from its investment in the upcoming IPO.”
IPO price for Tata Technologies
On the expected price based on company’s IPO valuations, Abhay Doshi, founder of UnlistedArena.com, which deals in unlisted stocks, stated, “The pricing of Tata Technologies (IPO) will ultimately be determined by the company.” However, market analysts are using close peers as KPIT Tech and Tata Elxsi to estimate its potential valuation. Based on their current P/E at 80x and 55x respectively (TTM basis), it is estimated that Tata Technologies could be valued between ₹700 to ₹880 if we take into account their annualised FY23 EPS of around ₹13.”
“However, Tata Group is widely known for its investor-friendly approach, so there is a possibility of the IPO being priced reasonably while still leaving a lot of value on the table for investors,” Abhay Doshi added.
Today’s grey market share price for Tata Technologies
“The bullishness of investors can be seen in the fact that the unlisted shares of Tata Technologies have already exceeded 830,” Abhay Doshi said in response to Tata Technologies shares in the unlisted market. While the final pricing of the IPO is unknown, it is clear that there is significant interest in the company.”
Date and time of IPO
Asked about Tata Technologies IPO date and time of launch, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “We can expect SEBI’s nod to it’s IPO in current quarter and after that we can add none to two month more at maximum. This means by July end of this year, we can expect Tata Technologies IPO to hit primary market. However, there is no sure shot time frame for SEBI to give its nod to a DRHP.”
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