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Tata Technologies IPO Sees Strong Demand on Day 2, Oversubscribed Amid Investor Enthusiasm

In a remarkable turn of events, the initial public offering (IPO) of Tata Technologies has garnered substantial attention, emerging as oversubscribed on the second day of bidding. With a price band set between ₹475 to ₹500 per share, the IPO, valued at ₹3,042.51 crore, is entirely an offer for sale (OFS) of 6.09 crore equity shares by the promoter and investors.

The subscription window for the Tata Technologies IPO opened on November 22 and is scheduled to remain active until November 24.

Key Details:

Tata Technologies, a subsidiary of Tata Motors, stands out as a pure-play manufacturing-focused Engineering Research & Development (ER&D) company, primarily dedicated to the automotive industry.

Prominent in the IPO is an offer for sale by Tata Motors, the primary promoter, who will offload 4.62 crore equity shares worth ₹2,313.75 crore. Additionally, investors Alpha TC Holdings Pte Ltd and Tata Capital Growth Fund I will collectively sell 1.46 crore shares.

Analyst Recommendations:

Market analysts widely recommend subscribing to the Tata Technologies IPO. Motilal Oswal Financial Services emphasizes the company’s niche presence, strong parentage, and strategic partnerships. Geojit Financial Services also considers the IPO reasonably priced compared to peers.

Arihant Capital Markets anticipates robust earnings growth for Tata Technologies, positioning it favourably against competitors such as Tata Elxsi, L&T Technologies, and KPIT Technologies.

Grey Market Premium (GMP) and Subscription Status:

The grey market premium for Tata Technologies IPO stands at ₹395 per share, reflecting a substantial 79% increase over the issue price. As of day 2, the IPO has been subscribed 10.22 times, with bids for over 46 crore equity shares against the available 4.50 crore shares.

Investor Enthusiasm:

Investor enthusiasm is notably high, fueled by the distinction of being the first IPO from the Tata Group in nearly two decades. The company’s improving financials, strong brand legacy, and reasonable valuations contribute to its appeal.

As the subscription period continues, Tata Technologies IPO holds promise for both short-term listing gains and long-term investment prospects, making it a focal point of interest in the current market landscape.

Rugmini Dinu