Tata Technologies Ltd., the salt-to-software conglomerate’s first company to list since 2004, more than doubled in its Mumbai stock market debut, providing another boost to India’s busy initial public offering market.
The shares rose to as much as 1,400 rupees (Dh62), compared with an offer price of 500 rupees (Dh22). The company’s first share sale worth 30.4 billion rupees ($365 million) was oversubscribed 69 times last week as investors invested in the engineering research division of Tata Motors Ltd., the maker of Jaguar and Land Rover cars , streamed.
The IPO comes as India sees a record number of initial public offerings in 2023, driven by a booming stock market and optimism about the country’s economic growth. The excitement peaked last week when initial share sales by five issuers, including Tata Technologies, raised a combined application amount of 2.5 trillion rupees.
“Strong optimism in the domestic market has driven the surge in IPOs in the last two years,” Jahnavi Prabhakar, economist at Bank of Baroda, wrote in a note on Wednesday. “A large number of IPOs have listed at a premium, which is a win-win situation for investors.”
While India’s 205 IPOs so far in 2023 have been largely small – only two raised more than $500 million – about 80 percent of new entrants are trading above their offering prices, compared with 62 percent in Asia. Indian Renewable Energy Development Agency Ltd., a state-run lender for renewable energy projects, rose 88 percent in its stock market debut on Wednesday.
Tata Technologies provides technical research and development services, product development and digital solutions to global OEMs and their key suppliers. The company wants to expand into aerospace, transportation and electric vehicles.
The automotive business generates around 70 percent of sales, with Tata Motors and JLR among the top customers and Vietnamese company Vinfast becoming a key customer.
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