Tata Group is all set to gear up with the Initial Public Offering(IPO) of any of its subsidiaries after nearly two decades. Tata Technologies, the subsidiary of Tata Motors, will launch its IPO soon. However, the company remains in the limelight due to its decision to offload 8.1 crore shares, which might affect its IPO in the future. You might be curious to know why Tata Motors made this decision at this crucial point.
Whether you are an investor in Tata Technologies or looking for investment in its IPO shares, getting to know its parent company’s strategic planning behind offloading its shares will be crucial for you. This blog will discuss the possible reasons behind Tata Motors’s decision.
An Overview Of Tata Technologies’ Upcoming IPO
The last IPO by Tata’s conglomerate was of Tata Consultancy Services(TCS), launched in 2004. After almost a decade Tata Motors is all set to launch the Tata Technologies IPO, which might be launched by the end of this year.
As per the information shared by the company in the DRHP, Tata Tech IPO will comprise 95,708,984 equity shares for cash, representing approximately 23.60% of its paid-up capital share. In addition, the IPO of Tata Technologies will also include an offer for the sale of up to 81,133,706 equity shares, which Tata Motors offloads (we will discuss it in the next section).
Reasons Behind Tata Motors’ Decision To 8.1 Crore Offload Shares
The recent decision made by Tata Motors to offload 8.1 crores of shares from Tata Technologies put every investor in a dilemma. Most retail investors worried about the change in Tata Technologies share price, which was also affected by this news.
Since Tata Technologies is a subsidiary of Tata Motors, the ongoing debt on the parent company may affect the IPO valuation. Tata Motors owns around 75% of stakes in Tata Tech. Tata Tech’s IPO valuation was around Rs 8,000 crore, out of which Tata Motors stakes total valuation is Rs 6,000 crore. The company is offloading its 8.1 crore of shares, not the whole 30.3 crore shares they hold. In simple language, Tata Motors is withdrawing its Rs 1,600 crore from the IPO.
According to the sources, Tata Motors is expected to use this amount to reduce its debt. It will majorly affect Tata Technologies share price after its IPO launch. The company is looking to take advantage of the market conditions, and offloading its specific percentage of stakes is one of its business strategies. From the investor’s perspective, those who are planning to invest in the Tata Technologies IPO should also know the impact this decision can have on Tata Tech IPO shares in the future.
How Tata Technologies IPO May Affect In The Future?
Tata Technologies IPO, which might launch in the next year, remains in the limelight and becomes investors’ top choice for investment. Since Tata Motors decided to offload its specific percentage of shares, there are chances that the valuation of Tata Tech’s IPO will decrease.
In addition, the company is also looking to increase the quantity of the public issue shares, which will allow retail investors to invest in IPO shares in the coming months easily. Apart from this, we can expect the availability of the IPO shares with a pre-decided face value.
It means investors can buy Tata Technologies IPO shares hassle-free. However, one shouldn’t ignore Tata Technologies unlisted shares currently trading in the unlisted share market. At the time of IPO, Tata Technologies share price can be impacted and may reduce due to extensive demand for the IPO shares of the company.
Is It Beneficial To Invest in Tata Tech Unlisted Shares Before Its IPO?
Tata Technologies IPO has created hype in the market and is seen as a prominent investment opportunity to become a part of the company’s growth. Being a subsidiary of Tata Motors, the company has gained the trust of millions of people since its inception. In addition, it is a tech-oriented company that works on futuristic technologies.
If you are planning an investment in Tata Technologies IPO, you need to consider the company’s current performance. One of the smart moves you can make right now is to buy Tata Technologies unlisted shares. It will benefit you at the time when Tata Tech will go public. You will get early access to its IPO shares and other advantages in the future.
Unlisted shares are also a great way to diversify an investment portfolio. You can easily buy Tata Technologies unlisted shares using Stockify, India’s best online trading platform. Here; you will get updated Tata Technologies share price, annual reports, and fresh market data. Have any queries regarding unlisted shares? Connect with Stockify’s experts today.