Tata Motors has revived the plans to list its engineering and digital services subsidiary Tata Technologies. According to report by Moneycontrol, the company has approached investment banks for preliminary discussions in this regard. Tata Technologies IPO may offer exit route to its private equity investor Alpha TC Holdings Pte. Ltd.
Tata Motors currently owns slightly above 72% equity stake in the subsidiary while Alpha TC Holdings owns nearly 9%. According to its latest annual report accessed by IPO Central, Tata Capital Growth Fund and Tata Motors Finance Limited are other major shareholders. Ratan Tata and company chairman Subramanian Ramadorai also own small stakes in personal capacities. It is worth noting that Ramadorai is Tata group veteran and also served as vice chairman of Tata Consultancy Services (TCS) and chairman of Tata Elxsi in the past.
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Tata Technologies IPO plans faltered last time
Reports of the Tata Technologies IPO first emerged in June 2016. The company was looking to raise as much as INR1,400 crore back then. However, these reports were refuted by then Tata Motors’ chairman Cyrus Mistry.
Like other group companies, Tata Technologies started as a captive unit, supporting Tata Motors’ automotive business. However, it has come a long way since its start in 1994 and has reduced its dependence on the parent for revenues, although Tata Motors is still the biggest customer for Tata Technologies.
In the latest year, Tata Technologies posted a revenue of INR3,529.6 crore reflecting a growth of over 47%. Its profit after tax during FY2022 also surged 82.7% to INR 437 crore.