After getting fully subscribed within the first hour of its opening on Wednesday, the Tata Technologies IPO has already surpassed expectations as it closes today.
With regards to the subscription trends, the IPO has received bids for over 1 crore shares as against the 4.50 crore shares on offer.
As of 1:10 pm, the public issue has been oversubscribed 27.35 times, with massive bids across categories. The retail portion has been subscribed 14.20 times, while the quota for qualified institutional buyers has been subscribed 39.99 times. However, the portion reserved for non-institutional investors has seen the highest bidding as it has already been subscribed 48.77 times.
All other categories that are a part of the public issue have also witnessed strong subscription, living up to the expectations of analysts who have been optimistic about the Tata Group company's first IPO in two decades.
Latest Grey Market Premium
With strong demand for the Tata Technologies IPO, its shares are also trading at a significant premium on the unlisted grey market.
The grey market premium (GMP) for the Tata Technologies IPO stands at Rs 412, marking an increase over yesterday's Rs 403, according to market observers.
The premium on the grey market indicates that Tata Technologies is likely to make a strong debut on the stock markets, at Rs 912 – a premium of 82.4 per cent.
The IPO, entirely an offer for sale (OFS) with an issue size of Rs 3,042.51 crore, involves the sale of 6.09 crore equity shares by the promoter and investors. The price band for the IPO is set at Rs 475 to Rs 500 per share.
Tata Motors, the promoter, is set to offload 4.62 crore equity shares worth Rs 2,313.75 crore, while investors Alpha TC Holdings Pte Ltd and Tata Capital Growth Fund I will sell 97.17 lakh and 48.58 lakh shares, respectively.
Key IPO details and brokerage views
Tata Technologies, a Tata Motors subsidiary, specialises in Engineering Research & Development (ER&D) services, primarily focusing on the automotive industry.
The IPO, entirely constituting an Offer for Sale (OFS) with a total value of Rs 3,042.51 crore, involves the divestment of 6.09 crore equity shares by the promoter and investors. The pricing range for the IPO is established at Rs 475 to Rs 500 per share.
Tata Motors, the principal promoter, plans to divest 4.62 crore equity shares, amounting to Rs 2,313.75 crore. Simultaneously, investors Alpha TC Holdings Pte Ltd and Tata Capital Growth Fund I are set to sell 97.17 lakh and 48.58 lakh shares, respectively.
Market analysts express optimism regarding Tata Technologies' future, emphasizing improved financials, a robust brand legacy, and reasonable valuations.
Motilal Oswal Financial Services suggests subscribing to the IPO, underscoring the company's niche market presence, strong parentage, and strategic collaborations.
The IPO is deemed attractively priced at 29x 1HFY24 P/E, offering a competitive edge against industry peers. Arihant Capital Markets underscores Tata Technologies' diverse service portfolio and recommends subscription for potential short-term listing gains and favorable long-term investment opportunities.
On a similar note, Geojit Financial Services provides a "Subscribe" rating for medium to long-term considerations, acknowledging the company's solid brand reputation, extensive automotive proficiency, and global footprint.