Shares of Tata Technologies Ltd., the first firm from the salt-to-software conglomerate to list since 2004, begin trading in Mumbai on Thursday, boosting India's bustling market for initial public offerings.
Tata Technologies' initial public offering (IPO) raised Rs 3,040 crore ($365 million), with shares priced at Rs 500 apiece, the top of the marketing range. Investors flocked to Tata Motors Ltd engineering unit, which is owned by premium carmaker Jaguar Land Rover. Demand outstripped supply by 69 times.
The transaction occurs as India sets a record number of listings in 2023, spurred by a thriving stock market and optimism about the country's economic growth. The enthusiasm reached a fever pitch last week, when five issuers, including Tata Technologies, raised a total of Rs 2.5 trillion in application funds.
"Strong domestic market optimism has fueled the surge in IPO listings over the last two years," Jahnavi Prabhakar, an economist at Bank of Baroda, wrote in a report on Wednesday. "A large number of IPOs have been listed at a premium, making this a win-win situation for investors."
While the 205 IPOs in India so far in 2023 have been primarily tiny — only two have raised more than $500 million — around 80% of the entrants are trading above their offer prices, compared to 62% in Asia. The stock of Indian Renewable Energy Development Agency Ltd., a state-run financier for renewable energy projects, increased 88% in its trading debut on Wednesday.
Tata Technologies supplies worldwide OEMs and their major suppliers with engineering research and development services, product development, and digital solutions. The corporation intends to diversify into aircraft, transportation, and electric automobiles.
Its automotive industry accounts for over 70% of sales, with important clients including Tata Motors and JLR, as well as Vietnam's Vinfast emerging as a major customer.
