Tata Tech in talks with Morgan Stanley, BlackRock, others for IPO investment

Tata Technologies is in talks with some US investment firms, including Morgan Stanley and BlackRock, to invest in its initial public offering (IPO) in India, Reuters reported on Wednesday.

The $350-375 million IPO is likely to open for retail subscription on 21 November in what would be the first share sale in over two decades from the Tata group, which has several listed companies in India and abroad.

Tata Technologies is reportedly in talks with US asset managers Ghisallo Capital, Oaktree Capital, and Key Square Capital, besides Blackrock and Morgan Stanley, to invest in the anchor book, which is open to high-profile institutional investors before the subscription opens for retail and other investors.

Last month, TPG Rise Climate SF Pte. Ltd, a climate investment fund of TPG Global, bought a 9.9% stake in Tata Technologies Ltd for ₹1,613.7 crore (about $194 million), at a valuation of about $2 billion.

Tata Technologies is now seeking a valuation of about $2.5 billion from the share sale, which could be India’s biggest IPO this year after Mankind Pharma, Reuters said.

In its draft IPO papers filed with market regulator Securities and Exchange Board of India (Sebi) earlier this year, Tata Technologies had reported a profit of ₹4,074 million ($48.94 million) and a total income of ₹30,522.95 million ($366.37 million) for the nine months to December 2022.

Part of the $300 billion Tata group conglomerate, Tata Technologies provides engineering services to companies in various sectors.

According to its website, the company serves businesses across automotive, aerospace, industrial heavy machinery, and other industries to conceptualize, develop, and realize safer, more sustainable products, and experiences.

The company’s list of clients includes original equipment manufacturers and their tier-1 suppliers. About 75% of its revenue comes from the automotive sector, with major clients such as Tata Motors and Jaguar Land Rover that collectively contribute 40% of the company’s services revenue.