Tata Technologies GMP soars after robust subscription. check allotment date and other details

After an overwhelming response to the IPO, the shares of Tata Technologies are in high demand in the unlisted market with the GMP as high as Rs 412.

Considering the upper price band of Rs 500, the stock is expected to list at a massive premium of Rs 82% over the issue price.

However, it is important to note that grey market premiums are just an indicator of how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.

The tentative allotment for the IPO is November 28 or even before and the listing will likely be on November 30.

The Rs 3,042-cr IPO of Tata Technologies received bids worth over Rs 1.5 lakh crore. The overall subscription was nearly 70 times the shares on offer.

The quota reserved for retail individual investors (RIIs) was subscribed 16 times, qualified institutional buyers 203 times, and NII 62 times.

Analysts said the strong response for the IPO was due to attractive valuations compared to peers and Tata lineage, which enjoys strong brand value.

Tata Tech’s FY23 PE ratio stands at 32-33x, as against 105x for KPIT, 40x for L&T Technology Services, and 70x for Tata Elxsi. The company has also outpaced all of its peers when it comes to financial growth over FY21-23.

Tata Technologies is a pure-play manufacturing-focused engineering research and development (ER&D) company, primarily focused on

the automotive industry.

They are currently engaged with 7 out of the top 10 automotive ER&D spenders and 5 out of the 10 prominent new energy ER&D spenders in 2022. It generates 80% from services, 11% from products and 9% from education as of FY23.

Some of the key strengths of the company include differentiated capabilities in new-age automotive trends like electric vehicles, deep expertise in the automotive industry, and a global delivery model that enables intimate client engagement and scalability among others.

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