Tata Technologies IPO: Tata Technologies filing papers with the market regulator SEBI led to surge in Tata Motors shares on Friday despite weak sentiments on Dalal Street. Under this public issue, Tata Motors intends to sell 8,11,33,706 Tata Technologies shares that the auto major acquired at ₹7.40 apiece. So, Tata Motors is expected to reap big gains from the Tata Technologies IPO and hence market has gone highly bullish on Tata Motors shares.
Tata Technologies IPO details
Speaking on Tata Technologies IPO impact on Tata Motors shares, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Tata Technologies is an IT company and Tata Motors has stake in this IT company that has applied to SEBI for its IPO. The IPO is expected to receive good response from investors due to the big name Tata being attached with the public issue. For Tata Motors, Tata Technologies IPO is going to bring cash flow as they acquired Tata Technologies shares at ₹7.40 per share (as written in the Draft Red Herring paper or DRHP).”
Gorakshkar said that Tata Technologies is yet to fix IPO price but it’s for sure that Tata Technologies IPO price would be at least 4-5 times of the rate at which Tata Motors acquired stake in Tata Technologies. So, Tata Motors is expected to reap huge benefit from Tata Technologies IPO, said Avinash Gorakshkar.
On how Tata Technologies IPO would benefit Tata Motors share price in near term, Anuj Gupta, Vice President — Research at IIFL Securities said, “With Tata Technologies IPO, Tata Motors is going to book profit and hence cash flow in Tata Motors will go up after Tata Technologies share listing. In Q3FY23 results, Tata Motors beat the market estimates by big margin that has put Tata Motors shares in uptrend. This uptrend is expected to go further northwards after re-opening in China as it has big exposure in JLR sales in Chinese market. Hence, Tata Motors is expected to improve its balance sheet in upcoming quarter due to strong business outlook and Tata Technologies IPO is going to work as icing on the cake in near term.”
Tata Technologies IPO price
On expected Tata Technologies IPO price, Gaurav Dua, Head – Capital Market Strategy at Sharekhan by BNP Paribas said, “Listing of Tata Technologies, subsidiary of Tata Motors, could unlock value for shareholders. Though the pricing is still not clear yet but the street expects the company to list at M-Cap of around Rs18000 crore. Consequently, it could roughly add ₹35 to ₹40 per share in SoTP valuation of Tata Motors.”
Tata Motors share price outlook
Expecting strong rally in Tata Motors shares, Anuj Gupta of IIFL Securities said, “Tata Motors share price has strong support at ₹420 apiece levels and those who have this stock in their portfolio can hold the stock with stop loss below ₹420 per share levels. Those who want to buy Tata Motors shares can buy this auto stock at current levels for short to medium term target of ₹490 to ₹500 per share maintaining strict stop loss below ₹420 levels.”
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.
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