The initial public offering (IPO) of Tata Technologies continued to see a strong buying interest from all categories of investors during the initial two hours of the bidding on day one. The Tata Group's primary offering, which kicked off for subscription on Wednesday, November 22, was overall subscribed 6.54 times on Day 1. Tata Technologies is raising a total of Rs 3,042.51 crore via its initial stake sale in the fixed price band of Rs 475-500 per share in the lot size of 30 equity shares and its multiples thereof. The issue is entirely an offer-for-sale (OFS) of up to 6,08,50,278 equity shares by promoter and other selling shareholders of the company According to the data, the investors made bids for 53,06,52,660 equity shares, or 11.78 times, compared to the 4,50,29,207 equity shares offered for the subscription by 2.15 pm on Thursday, November 23. The three-day bidding will conclude for bidding Tomorrow, that is, Friday, November 24. The portion reserved for non-institutional investors (NIIs) was subscribed 23.58 times, while the allocation for shareholders of Tata Motors was booked 146.45 times. The portion for retail investors saw a subscription of 9.45 times. The quota set aside for qualified institutional bidders (QIBs) saw a bidding of 6.22 times, while the employees' portion was booked twice at the same time. Majority of the brokerage firms tracking the issue are positive on it and have suggested to subscribe to the issue. They see strong management and promoter background, robust balance sheet, attractive valuations and solid growth potentials in emerging sectors as the key positives for the issue. "We recommend subscribing to the IPO given the long-term opportunities in the Er&d segments of automotive, aerospace, size and scale to participate in the same and scope to improve margins & cash flow going ahead," said Incred Equities. The automotive vertical opportunity remains a key growth driver. Cash conversion could be more stable, it said. Tata Technologies raised Rs 791 crore from 67 investors through the anchor book as it allocated 1,58,21,071 equity shares at a price of Rs 500 per share. JM Financial, Citigroup Global Markets India and BofA Securities India are the book running lead managers of the IPO, while Link Intime India is the registrar for the issue. Tata Tech’s IPO is coming in at a PE of 25/21 times FY25/26 on our estimates, lower than Indian ER&D service providers that trade at 41x/ 35x median PE, said Phillip Capital. "We believe Tata Tech can be a beneficiary of strong momentum in Auto & Aero ER&D spends in the near to medium term. We recommend subscribing to the IPO," it said.
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