Tata Technologies IPO oversubscribed on Day 1; here’s how stocks from Tata group performed since 2004

Tata Technologies’ initial public offering (IPO), which got oversubscribed on the first day, marks a significant milestone for the Tata group. It comes after a gap of 19 years, following the listing of information technology major Tata Consultancy Services (TCS) in 2004. The IPO of Tata Technologies, which has got a subscribed rating from most of the market analysts, will be the 27th stock from the group post listing.

Data available with NSE showed that the ongoing IPO of Tata Technologies subscribed more than 2.50 times till 12.24 pm on Wednesday. The issue will close on November 24. The company has fixed a price band of Rs 475 to Rs 500 per share on a face value of Rs 2. At present, shares of Tata Technologies traded at a premium of Rs 350 per share in the unlisted market, indicating a listing premium of Rs 70 per cent. This shows the confidence among market participants for Tata Technologies.

Sharing its view on Tata Technologies (TTL), Geojit Financial Services in a report said, “At the upper price band of Rs 500, TTL is available at P/E of 28.8x (FY24E annualised EPS), which appears to be reasonably priced compared to peers. Its strong brand legacy, extensive automotive expertise, diversified global presence and strategic partnership with industry leaders provide a distinct advantage that aligns well with its growth ambitions. Hence, we assign a “Subscribe” rating on a medium to long-term basis.”

Earlier, shares of the majority of Tata group companies rewarded investors handsomely since the listing of TCS in August 2004. With a gain of 49,395 per cent, Titan Company emerged as the top gainer in the list. Share of the jewellery and watchmaker surged to Rs 3,394.15 on November 21, 2023 from Rs 6.86 on August 25, 2004. Brokerage JM Financial has a ‘Buy’ rating on Titan with a target price of Rs 3,705.

“Titan’s businesses again displayed some remarkable resilience and strength during the September quarter. We expect Titan to continue commanding a premium valuation, more so given the scarcity of ‘growth-businesses’ in the space at this point,” JM Financial said in a report.

It was followed by Tata Elxsi (up 12,731 per cent), Artson Engineering (up 9,770 per cent) and Trent (up 8,798 per cent). On the other hand, the benchmark BSE Sensex soared around 1196 per cent to 65,930.77 during the same period.

Of late, Saurabh Mukherjea-owned Marcellus Investment Managers added Trent in its Rising Giant PMS strategy. While sharing its view on Trent, Marcellus Investment Managers in a newsletter said, “Near-term earnings growth prospect for Trent will be linked to Westside (more of the same), Zudio (propelled by store network expansion) and Star Bazaar (profitability turnaround and store network expansion). However, Trent continues to incubate newer retail formats, some of which could become as successful as Zudio in future.”

“Whilst at first glance, Trent’s P/E multiple looks rich, there are three factors which have to be incorporated while considering its valuations: INDAS 116 impact (accelerated store count expansion of any retailer leads to P&L reflecting up-fronted costs of rentals which is a non-cash item and is therefore ignored by us); a drop in losses and the potential turnaround of Star Bazaar format at a store level and the impact of rapid growth of Zudio on Trent’s forward P/E multiple in the near future,” it said.

Voltas, Rallis India, Benares Hotels, Tata Investment Corporation, Tata Consultancy Services, Tata Consumer Products, Nelco, Tata Coffee, Automobile Corporation of Goa, The Indian Hotels Company and Tinplate Company of India also gained somewhere between 1,200 per cent and 6,500 per cent since August 2004.

KR Choksey is bullish on Tata Consumer Products with a target price of Rs 1,066. “Tata Consumer is seeing volume growth in its India beverages and foods business driven by the core businesses of tea and salt as well as the growth businesses which include Tata Sampann, NourishCo, Tata Soulfull and Tata Smartfooz. The core tea and salt businesses are expected to inch up to mid-single-digit volume growth in the medium term. The growth businesses will add to the topline while seeing gradual margin improvements as they scale up.”          

On the other hand, Tata Power Company (up 973 per cent), Tata Communications (up 912 per cent), Tata Metaliks (up 874 per cent), Tata Motors (up 828 per cent), Automotive Stampings and Assemblies (up 800 per cent), Oriental Hotels (up 704 per cent), TRF (up 662 per cent), Tata Chemicals (up 655 per cent), Tata Steel (up 504 per cent), Tata Teleservices (Maharashtra) (up 409 per cent) and Tayo Rolls (up 74 per cent) underperformed the Sensex during the same period.

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