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Tata Technologies, a subsidiary of Tata Motors, is expected to open its Initial Public Offering (IPO) for public subscription at the end of this month or September.
The company recently received the nod from market regulator Securities Exchange Board of India in June. According to the draft papers, the company’s IPO is an offer for sale wherein the company will sell up to 9.57 crore equity shares which represent approximately 23.60 per cent of its paid-up share capital. Under the OFS, The parent company Tata Motors will offload 8.11 crore shares or a 20 per cent stake in the company.
It is after 19 years that a Tata Group company is going to list at the stock market.
Speaking about price band, Dr. Ravi Singh, market expert, said,”Tata group carries a strong reputation of trust and legacy. The Tata Tech company is a leading player in the automotive ER&D services globally. If we compare with its peer’s valuation, Tata technologies IPO may open at higher price but to keep enough space for the investors, the IPO may open around the price band of Rs. 280 – 320″.
Vaibhav Kaushik, research analyst, GCL Broking, said,”Since the company has proposed 405,668,530 shares for listing on the Indian stock exchanges, the IPO price of Tata Technologies would be around ₹295. So, in case of a neck-and-neck race in valuations, the IPO price of Tata Technologies can be expected around ₹295″.
“Sometimes, companies offer their shares at a discount of 10-15 points to make them more attractive to investors. In this case, Tata Technologies’ IPO price could be between ₹265 and ₹270 per share. However, when expectations of response are high, companies also try to maximise their returns and therefore offer their shares at valuations that are the same percentage points higher. In this case, Tata Technologies’ IPO price is likely to be ₹315 to ₹320 per share”, he added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Hindustan Times. We advise investors to check with certified experts before taking any investment decisions.
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