Tata Motors announced on December 12th that it had authorized the partial divestment by Tata Technologies of its equity shares via an initial public offering ( IPO).

moneycontrol was first to report listing plans for Tata Technologies . The listing plan was announced by Moneycontrol on July 8, 2022. It is a global product engineering company that offers digital services and has seen a rapid increase in demand for electric vehicles.

TCS 2004 was the first domestic bourse debut for a Tata Group company.

Tata Autocomp Systems canceled a $260mn IPO earlier this month. Tata Play (formerly Tata Sky), filed for a confidential prefiling of offer documents.

“We are pleased to inform that the IPO Committee, duly constituted today by Tata Motors Limited, has approved its in principle approval to examine the possibility of partial divestment of Tata Technologies Limited’s investment in Tata Motors Limited. A subsidiary of the Company, through an IPO Route at an opportune moment, subject to market conditions and regulatory clearances (including observations of Tata Motors from the Securities and Exchange Board of India and certain other considerations,” stated Tata Motors in the disclosure.

It added that the Company will continue to make announcements about all material developments relating IPO, as and whenever required, in accordance with SEBI LODR Regulations, and any other applicable law.”

According to Tata Motors 2022 annual reports, Tata Technologies has a mere 74% stake. Tata Motors had, however, stopped the sale of a substantial minority stake ( 43%) in Tata Technologies to Warburg Pincus at $360 mn in early 2018. This was due in part to the non-receipt or lack of regulatory approvals as well as internal performance challenges due to market conditions.

Based on the terms of the deal that was canceled, Tata Technologies had a 100-percent stake valued at $837 mn.

TATA TECHNOLOGIES – RUNNWAY TO GROWTH

Tata Technologies CEO Warren Harris has witnessed a sharp increase in revenues in the last year. This is due to an ease in regulatory and medical guidelines that allowed for better business activities along with new business opportunities.

S Ramadorai (ex-TCS veteran) was the chairman of the board. He spoke of the improved performance of the firm in the most recent annual report.

Your company has produced outstanding results, despite all the obstacles we’ve faced. Tata Technologies generated revenue of USD 473.5M (INR 35329.6 Cr) for the year ending 31 March 2022. It also earned an operating profit of USD 645.6 Cr and profit after tax at USD 58.0M (INR 4377.0 Cr). Ramadorai noted that these are the best results ever, with a year-on–year increase in revenue of 47% and operating profit growths of 65%, respectively, and a profit after tax of USD 58.0 M (INR 437.0 Cr).

Parent Tata Motors is aiming to have a near zero net automotive debt by FY24. This was also taken into consideration in its annual report for 2022. “Revenues from other operations (before intersegment exclusions) increased by 45.8% and reached Rs 3,809 crore for FY 2021-22. This is compared with Rs 2,612 crore for FY 2020-21. According to the report, this is due to Tata Technologies increasing revenue after the COVID-19 epidemic.

Tata Motors’ net auto debt (including leases) rose to Rs 48.679 Crore in FY22, compared to Rs 40.876 crore for FY21.

TATA TECHNOLOGIES – A CLOSER LOOK

Tata Technologies concentrates on four main verticals, namely automotive and aerospace as well as industrial machinery and industrials. Its services are provided through the following lines: a. Engineering, Research, and Development services; b. Digital Enterprise Solutions, (DES), which includes offerings for Connected Enterprise IT and Product Lifecycle Management (PLM services); c. Education offerings and d. Products, including our product-value-added reselling and iProducts offerings.

9300 people work for the company, which serves clients worldwide from locations in North America and Europe. It has 18 global delivery centers at Pune (Head Quarter), Gurgaon Bengaluru, Thane and Chennai (India), SEA – Shanghai (China), Bangkok, Singapore, Tokyo (Japan), Hanoi [Vietnam], Europe – Brasov & Craiova (Romania), Gothenburg & Gothenburg (Sweden), Gaimersheim / Germany), Warwick / UK, North America — Detroit (USA). 

 

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