Tata Motors subsidiary IPO: Tata Technologies files DRHP for public issue of shares Tata Motors Ltd subsidiary Tata Technologies Ltd has filed a draft red herring prospectus with Securities and Exchange Board of India (SEBI) to raise funds via initial public offering (IPO). The issue comprises an offer for sale of up to 95.71 million equity shares for cash (Equity Shares), representing approximately 23.60 per cent of its paid-up share capital (IPO), according to the exchange filing. Additionally, Tata Motors will sell 81.13 million shares or 20 per cent stake through an Offer for Sale (OFS). Other shareholders that will sell their stakes: Alpha TC Holdings Pte Ltd will sell 9.72 million shares; Tata Capital Growth Fund I will sell 4.86 million shares. Each of these will represent up to 20 per cent, 2.40 per cent, and 1.20 per cent respectively of Tata Technologies paid-up share capital. Tata Technologies is a global engineering and product development digital services firm and offers services across industries like automotive, aerospace, industrial heavy machinery and others. Its clients include Airbus SE, McLaren, Honda Motor Co and Ford Motor Co, besides Tata Motors and JLR. The company mostly relies on the Tata Group for business, especially Tata Motors and Jaguar Land Rover. Nevertheless, Tata Technologies has increased the share of business generated outside as well. Its non-captive account contribution increased to 64 per cent in FY22 from 46 per cent in FY20.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.