The previous IPO from the conglomerate was TCS in July 2004.
The Tata Technologies IPO consists entirely of an offer for sale (OFS), in which the selling shareholders will sell up to 9.57 crore units, representing 23.60% of the company’s paid-up share capital.
The Securities and Exchange Board of India (SEBI) has given approval for the initial public offering (IPO) of Tata Technologies. This IPO marks the first public issue from the Tata Group in almost two decades. Tata Technologies submitted its IPO documents to SEBI in March. The IPO consists entirely of an offer for sale (OFS), in which the selling shareholders will sell up to 9.57 crore units, representing 23.60% of the company’s paid-up share capital.
Indeed, the IPO of Tata Technologies holds significant anticipation as it marks the first public offering from the renowned Tata Group in 19 years. The previous IPO from the conglomerate was Tata Consultancy Services (TCS) in July 2004. Since then, TCS has emerged as one of the major wealth creators in the Indian stock market, with a current market capitalisation of approximately Rs 11.7 lakh crore. The long wait for another Tata Group IPO has generated considerable interest among investors and market participants.
Tata Technologies, a subsidiary of Tata Motors, is a specialised engineering services company that primarily focuses on providing product development and digital engineering solutions for manufacturing-oriented industries. Initially established as Core Software Systems in 1994, it was acquired by the Tata Group and subsequently renamed Tata Technologies in February 2001. The company’s expertise lies in delivering innovative engineering solutions to various sectors within the manufacturing domain.
Tata Technologies generates a significant portion of its revenue from the automotive vertical, accounting for 75% of its revenue mix. Tata Motors and Jaguar Land Rover, both part of the Tata Group, are the company’s key clients and contribute approximately 40% of its services revenue.
Tata Technologies specialised in product engineering and manufacturing engineering, particularly in the mechanical domain such as body engineering. While the company has expertise in these areas, it is also expanding its capabilities in software and embedded engineering. This aligns with the focus areas of other industry peers such as KPIT Tech, Tata Elxsi and L&T Tech Services, who are actively involved in software and embedded engineering segments.
In addition to its engineering and R&D services, Tata Technologies also operates in the products and education sectors. The products business contributes 11% to the company’s revenue mix and involves the reselling of third-party software along with value-added services. On the other hand, the education business represents 4% of the revenue mix and offers “phygital” (physical and digital) education solutions focused on manufacturing-related skills. This is accomplished through their proprietary iGetIT platform and competency centres.
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