About Tata Technologies IPO
Established in 1989, Tata Technologies stands as a prominent global entity specializing in engineering services and digital solutions, with a primary focus on the automotive, aerospace, and industrial sectors. Tata Technologies IPO can be a game changer for investors. It can be a multi-bagger listing on the exchange.
As a subsidiary of Tata Motors, this marks a significant milestone with the Tata group’s IPO, following a 19-year interval since the successful Tata Consultancy Services (TCS) IPO in June 2004. Headquartered in Pune, the company excels in providing outsourced engineering services and spearheading digital transformations for clients on a global scale, boasting a workforce exceeding 11,000 employees distributed across 18 global delivery centers.
Tata Technologies is dedicated to guiding companies through the entire product development lifecycle, ranging from conceptualization and design to development and delivery, thereby facilitating the creation of superior products. Notably, Tata Motors and Jaguar Land Rover (JLR) rank among the top five clients, with VinFast, a Southeast Asian electric vehicle original equipment manufacturer (OEM), also holding a significant position.
Demonstrating impressive financial performance, the company witnessed a Compound Annual Growth Rate (CAGR) surge of over 22% in revenue from operations and over 37% in profit between FY21 and FY23. Moreover, the global Engineering, Research, and Development (ER&D) expenditure is poised to escalate from $1.81 trillion in 2022 to an anticipated $2.67 trillion by 2026. Specifically, the outsourced ER&D spend is projected to experience a CAGR of 11-13% between 2022 and 2026, positioning the company favorably.
Embarking on a new chapter, Tata Technologies is set to launch its Initial Public Offering (IPO), constituting a complete offer for sale where existing shareholders and promoters will divest over 9.57 crore shares. The company’s shares will be listed on both the NSE and BSE.
Here are key Tata Technologies IPO details:
| Company Name | Tata Technologies Limited | Company Type | Private | |
| Company Established On | 1994 | Tata Technologies IPO Opening Date | November 22, 2023 | |
| Tata Technologies IPO Closing Date | November 24, 2023 | Tata Technologies IPO Allotment Status | November 30, 2023 | |
| Credit of Shares to the Demat Account | December 4, 2023 | Tata Technologies IPO Listing Date | December 5, 2023 | |
| Tata Technologies IPO Face Value | ₹2 per share | Tata Technologies IPO Lot Size | 30 Shares | |
| Tata Technologies IPO Issue Size | ₹3,042.51 Cr | Tata Technologies IPO to be Listed on | BSE, NSE | |
| Tata Technologies IPO Price band | ₹475 to ₹500 per share |
Profit & Loss statement of Tata Technologies year-wise
Consolidated Figures in Rs. Crores / See full profit and loss analysis on screener
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | |
|---|---|---|---|---|---|
| Sales + | 2,942 | 2,852 | 2,381 | 3,530 | 4,414 |
| Expenses + | 2,437 | 2,382 | 1,995 | 2,884 | 3,593 |
| Operating Profit | 505 | 470 | 386 | 646 | 821 |
| OPM % | 17% | 16% | 16% | 18% | 19% |
| Other Income + | 36 | 36 | 39 | 49 | 88 |
| Interest | 1 | 16 | 18 | 22 | 18 |
| Depreciation | 69 | 99 | 92 | 86 | 95 |
| Profit before tax | 471 | 392 | 315 | 587 | 796 |
| Tax % | 25% | 36% | 24% | 26% | 22% |
| Net Profit + | 353 | 252 | 239 | 437 | 624 |
| EPS in Rs | 81.96 | 58.47 | 55.59 | 101.57 | 145.05 |
| Dividend Payout % | 18% | 66% | 0% | 0% | 0% |
Explore the Tata Technologies IPO through a comprehensive SWOT analysis, delving into its strengths, weaknesses, opportunities, and risks.
Strengths and Potential Avenues:
- In-Depth Industry Expertise: Possesses extensive domain knowledge and proficiency within the automotive sector.
- Impressive Profit Margins: Experienced a substantial boost in EBITDA margin, rising from 6% to an impressive 19.2% between 9MFY21 and 9MFY22.
- Client Loyalty: Demonstrates strong client retention, as evidenced by 98% of 9MFY22 service segment revenue originating from repeat clients.
- Comprehensive EV Solutions: Offers holistic solutions to original equipment manufacturers (OEMs) in the development of competitive Electric Vehicles (EVs), encompassing concept design, engineering, and post-sales services.
- Proprietary E-Learning Platform: Utilizes a unique e-learning platform, leveraging manufacturing domain knowledge and tapping into expansive upskilling and reskilling markets.
- Global Market Presence: Enjoys a geographically diversified customer base across Asia Pacific, Europe, and North America, with 76% of revenue in the first nine months of the previous year derived from foreign currencies.
Risks and Potential Threats:
- Overreliance on Automotive Sector: The company heavily depends on automotive clients, constituting 88.4% of revenue in 9MFY22, making it susceptible to economic downturns or segment-related fluctuations.
- Concentration Risk with Top Clients: Faces revenue vulnerability if its top five clients experience business decline or cessation, as they contributed to 72.7% of 9MFY22 revenue.
- Cybersecurity Concerns: Exposed to threats such as unauthorized access, security breaches, computer hacks, viruses, and disruptions that pose risks to the integrity of the company’s data centers and networks.
- Intense Industry Competition: Navigates a competitive landscape in the engineering services sector, where intense rivalry could impact pricing strategies and potentially have adverse effects on business, financial stability, and operational results.
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