Tata Technologies IPO Gets 5.11x Subscribed on Day 1

Tata Technologies, a subsidiary of Tata Motors, has marked a significant milestone with its Rs 3,042.51-crore IPO opening for subscription on November 22. This IPO is the first from the Tata Group in over two decades which has garnered substantial attention, being subscribed 5.11 times on the initial day.

Subscription Breakdown

• Retail investors demonstrated strong interest, bidding 4.2 times their allocated share quota.
• High-net-worth individuals (HNIs) enthusiastically participated, subscribing 8.5 times.
• Qualified institutional buyers (QIB) showed a solid response, with a subscription rate of 3.96 times.

Employee and Shareholder Portion

The reserved portion for Tata Technologies employees witnessed a subscription of 0.82 times, while Tata Motors' shareholders booked 6.87 times their allocated shares.

Issue Structure

The IPO, with a price band of Rs 475-500 per share, is exclusively an offer-for-sale (OFS). Tata Motors, along with investors Alpha TC Holdings and Tata Capital Growth Fund 1, are the promoters offering their shares.

Market Outlook and Grey Market Premium

Analysts, speaking anonymously, highlighted the strong demand for IPO shares in the grey market, trading at a 70 percent premium over the upper price band. This enthusiasm is attributed to the company's robust performance, promising industry growth, and the trusted Tata brand.

Expert Recommendations

Leading financial experts have given a thumbs up to the issue, emphasizing factors such as favorable valuations, healthy business prospects, robust parentage, and superior financials. At the upper price band of Rs 500, the stock is valued at a PE multiple of 32.53 of its FY23 diluted EPS, with a market capitalization exceeding Rs 20,000 crore.

Long-Term Perspective

Asit C Mehta advised subscribing to the IPO from a medium to long-term perspective, citing Tata Technologies' expertise in the automotive industry and strong relationships with Tata Motors and JLR.

Conclusion

With its positive market outlook, strong subscription numbers, and an impressive lineup of investors, Tata Technologies' IPO is generating considerable buzz. As always, potential investors are encouraged to seek advice from certified experts before making any investment decisions. Stay tuned for further updates as the IPO journey unfolds.

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