Tata Technologies Limited IPO
Tata Technologies is a company that has a history of more than three decades in the engineering and IT services industry.
i. The company was envisioned by the then-Tata Group chairman, Mr. Ratan Naval Tata, who saw an opportunity in the evolving product engineering and manufacturing IT space.
ii. Tata Technologies was founded in 1989 as Tata Engineering Services, a division of Tata Motors, to provide engineering and design services to the automotive industry.
iii. In 1994, the company became an independent entity and changed its name to Tata Technologies.
iv. In 2005, the company acquired INCAT International, a UK-and US-based automotive and aerospace computer engineering company, to expand its global presence and capabilities.
v. In 2017, the company received a strategic investment of $360 million from Warburg Pincus, a private equity firm, to support its growth plans and digital transformation initiatives.
vi. In 2020, the company launched its new brand identity and manifesto, with the vision of engineering a better world for everyone.
vii. Today, the company provides services in engineering and design, product lifecycle management, manufacturing, product development, and IT service management to automotive and aerospace original equipment manufacturers and their suppliers. It is a subsidiary of Tata Motors and has headquarters in Pune, India. The company operates in 25 countries and has a global workforce of more than 11,000 employees.
Tata Technologies is a company that provides various services to the automotive and aerospace industries, such as:
i. Engineering and design: Tata Technologies helps its customers develop innovative and competitive products that meet the market needs and customer expectations. The company offers services such as concept design, product engineering, simulation and testing, validation and verification, etc.
ii. Product lifecycle management: Tata Technologies helps its customers manage the entire lifecycle of their products, from ideation to retirement. The company offers services such as PLM software sales, implementation, integration, customization, training and support, etc.
iii. Manufacturing: Tata Technologies helps its customers optimize their manufacturing processes and operations, by leveraging digital technologies and best practices. The company offers services such as digital manufacturing, manufacturing engineering, plant automation, industrial IoT, etc.
iv. Product development: Tata Technologies helps its customers accelerate their product development cycles and reduce costs, by providing end-to-end solutions that cover all aspects of product development. The company offers services such as project management, system engineering, software development, hardware development, etc.
v. IT service management: Tata Technologies helps its customers improve their IT performance and efficiency, by providing IT solutions and services that align with their business goals and strategies. The company offers services such as IT consulting, IT infrastructure management, IT application management, IT security management, etc.
Competitive Strengths
i. Deep expertise in the automotive industry
ii. Differentiated capabilities in new age automotive trends – electric vehicles (“EVs”), connected and autonomous
iii. Strong digital capabilities bolstered by proprietary accelerators
Objects of the Tata Technologies Limited IPO:
Tata Technologies Limited IPO Details:
Open Date: | Nov 22 2023 |
Close Date: | Nov 24 2023 |
Total Shares: | 60,850,278 |
Face Value: | ₹ 2 Per Equity Share |
Issue Type: | Book Building |
Issue Size: | 3,042.51 Cr. |
Lot Size: | 30 Shares |
Issue Price: | ₹ 475 to ₹500 Per Equity Share |
Listing At: | NSE,BSE |
Listing Date: | Dec 05 2023 |
Promoters And Management:
Financials of Tata Technologies Limited IPO:
Particular (In Million) | Mar-21 | Mar-22 | Mar-23 |
Equity Share Capital | 418.07 | 418.07 | 811.34 |
Reserves | 21,003 | 22,384 | 29,083 |
Trade Payables | 2,237 | 3,366 | 6,578 |
Other Liabilities | 12,069 | 16,012 | 15,542 |
Total Liabilities | 14,306 | 19,378 | 22,120 |
Net Block | 872 | 1,145 | 1,202 |
Capital Work in Progress | 0.4 | 3 | 26 |
Other Assets | 10,980 | 11,230 | 12,812 |
Total NC Assets | 11,852 | 12,378 | 14,040 |
Receivables | 5,958 | 7,682 | 11,062 |
Cash & Bank | 7,834 | 8,694 | 9,992 |
Other Assets | 10,084 | 13,426 | 16,920 |
Face value | 2 | 2 | 2 |
Particular (In Million) | Mar-21 | Mar-22 | Mar-23 |
Sales | 23,809 | 35,296 | 44,142 |
Raw Material Cost | 3,383 | 6,885 | 6,825 |
Change in Inventory | 2,414 | 3,998 | 5,697 |
Employee Cost | 12,160 | 15,127 | 19,295 |
Other Expenses | 1,995 | 2,829 | 4,116 |
Other Income | 448 | 488 | 878 |
EBITDA | 4,305 | 6,945 | 9,087 |
EBITDA Margin | 18.08% | 19.68% | 20.59% |
Depreciation | 922 | 857 | 946 |
Interest | 177 | 219 | 180 |
Profit before tax | 3,153 | 5,869 | 7,962 |
Tax | 761 | 1,499 | 1,721 |
Net profit | 2,392 | 4,370 | 6,240 |
NPM (%) | 9.86% | 12.21% | 13.86% |
Particular (In Million) | Mar-21 | Mar-22 | Mar-23 |
Cash From Operating Activity | |||
Profit From Operation | 4,174 | 6,693 | 8,635 |
Receivable | 1,483 | -1,856 | -3,026 |
Payable | -299 | 1,102 | 3,025 |
Loans And Advances | 0.3 | -19 | -10 |
Other WC Items | 6,873 | -5,029 | -2,181 |
Working Capital Changes | 6,575 | -3,946 | 835 |
Direct Taxes | -1,102 | -1,278 | -2,429 |
Net Cash Inflow from Operating Activity | 11,129 | -387 | 4,014 |
Cash from Investing Activity | |||
Fixed assets purchased | -147 | -634 | -657 |
Fixed assets sold | 10 | 5 | 4 |
Inter-corporate deposits | -2,235 | 2,075 | -4,423 |
Other investing items | -4,363 | -704 | 9,949 |
Net cash inflow from investing activities | -6,736 | 742 | 4,874 |
Cash from Financing Activity | |||
Proceeds from shares | 2 | 0 | -2959 |
Intrest paid fin | -25 | -4 | -0.5 |
Financial liabilities | -419 | -439 | -509 |
Other financing items | 0 | -1 | -0.2 |
Net Cash Flow | 3952 | -89 | -4329 |
Comparison With Peers:
Name of the Company | Revenue (In Crore) | PAT (In Crore) | EPS ( in Rs) | P/E | CMP | Mcap (In Crore) |
Tata Technologies Limited | 4,414 | 624 | 15.38 | 32.5 | 500 | 20,283 |
KPIT Technologies Limited | 3,365 | 387 | 13.90 | 86.2 | 1,537 | 42,126 |
L&T Technology Services Limited | 8,014 | 1,174 | 110.8 | 37.1 | 4,454 | 47,068 |
Tata Elxsi Limited | 3,145 | 755 | 121.26 | 65.9 | 8,307 | 51,731 |
Recommendation on Tata Technologies Limited IPO:
Overview
Established on August 22, 1994, Tata Technologies Limited, a subsidiary of Tata Motors Ltd, has cemented its position as a leading global engineering services company. Specializing in product development and digital solutions, the company notably serves global Original Equipment Manufacturers (OEMs) and Tier-1 suppliers. With deep domain expertise in the automotive industry, Tata Technologies extends its services to adjacent sectors like aerospace, transportation, and construction heavy machinery (TCHM).Core Business and Market Position
1. Engineering Research & Development (ER&D) Tata Technologies stands as a pure-play manufacturing-focused ER&D entity. Predominantly oriented towards the automotive sector, it collaborates with 7 of the top 10 automotive ER&D spenders and 5 of the top 10 new energy ER&D spenders as of 2022. This engagement underscores the company's influential presence and expertise in the field. 2. Service Offerings The primary business line revolves around services, including outsourced engineering and digital transformation services. These services aid global manufacturing clients in the conception, design, development, and delivery of superior products. 3. Technology Solutions In addition to services, Tata Technologies offers Technology Solutions, encompassing Products and Education businesses. The Products segment involves reselling third-party software applications, primarily focusing on Product Lifecycle Management (PLM) software and related services. The Education segment aims at equipping the upcoming generation of engineers and technicians with industry-relevant skills.Global Presence and Partnerships
Tata Technologies boasts a diversified global client base, supported by 19 delivery centers across North America, Europe, and the Asia Pacific as of September 30, 2023. The company has forged significant partnerships and alliances with entities like Dassault, Logility, Siemens Industry Software Inc., Codincity, and Fantasy, and leverages Microsoft AZURE products/services. A recent empanelment by Airbus marks a significant stride, potentially opening new growth avenues.Financial Performance and Valuation
Financial Growth Tata Technologies has demonstrated robust revenue and margin growth over the years, reinforcing its status in the global engineering services domain. The company's comprehensive service portfolio caters to both traditional OEMs and emerging new energy vehicle companies, along with their supply chains. Valuation Metrics At the upper price band, Tata Technologies is valued at a Price-to-Earnings (P/E) ratio of 32.5x, translating to a market capitalization of ₹20200 Cr post the issuance of equity shares. The return on net worth stands at 20.8%. The nearest Peer is KPIT which is trading at P/E of 80x. The GMP of 300+ Indicating a strong listing gain.Conclusion
Tata Technologies, through its extensive expertise and global presence, has established itself as a key player in the engineering services domain, particularly in the automotive sector. The company's strategic partnerships, global delivery centers, and diversified service offerings position it well to capitalize on the evolving demands of the manufacturing industry. With a strong financial footing and a forward-looking approach, with reasonable valuation, the Tata Technologies is poised for continued growth and innovation in the global engineering landscape.Lead Manager of Tata Technologies Limited IPO:
Registrar of Tata Technologies Limited IPO:
Company Address:
Discussion on Tata Technologies Limited IPO:
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Can anyone please let me know the propotionate allotment in shareholder category. What does it mean and how do we take benefit of it?
Proportionate allotment means the more shares or lots you bid for the more are your chances of allotment. You can take benefit from it in this ipo under shareholder quota by applying for max i.e 13 lots under shareholder quota for maximum chances of allotment of 1 lot + some shares.
Financial Parameters are awaited please.