𝐂𝐲𝐜𝐥𝐨𝐧𝐞 𝐁𝐢𝐩𝐚𝐫𝐣𝐨𝐲'𝐬 𝐃𝐞𝐯𝐚𝐬𝐭𝐚𝐭𝐢𝐧𝐠 𝐈𝐦𝐩𝐚𝐜𝐭: 𝟖𝟎𝟎 𝐔𝐩𝐫𝐨𝐨𝐭𝐞𝐝 𝐓𝐫𝐞𝐞𝐬, 𝟓𝟎𝟎 𝐇𝐨𝐮𝐬𝐞𝐬 𝐃𝐚𝐦𝐚𝐠𝐞𝐝, 𝐚𝐧𝐝 𝟐𝟑 𝐈𝐧𝐣𝐮𝐫𝐞𝐝

The filing of the Draft Red Herring Prospectus (DRHP) by Tata Technologies Ltd for its IPO has had a positive impact on Tata Motors shares, with the stock witnessing an upward trend. Over the course of three months since the IT company filed the DRHP, Tata Motors' share price has surged from ₹430 to ₹562, marking a significant increase of over 30 percent. Market experts predict that this uptrend may continue, as the launch of the Tata Technologies IPO is expected to bring substantial benefits to Tata Motors.

Analysts have highlighted that Tata Motors' shares may benefit from the IPO as it involves the sale of shares held by the auto giant. The IPO is structured as a 100 percent offer for sale (OFS), meaning that the net proceeds will strengthen Tata Motors' balance sheet rather than Tata Technologies'. Given that Tata Motors acquired Tata Technologies shares at ₹7.40 apiece (as mentioned in the DRHP), and the unlisted stock market currently values Tata Technologies shares around ₹850 per share, the market anticipates significant financial gains for Tata Motors from this upcoming IPO. This optimism has led to projections of Tata Motors' share price potentially reaching ₹615 per share ahead of the Tata Technologies IPO launch date.

The Impetus Behind Tata Motors' Surge

Avinash Gorakshkar, Head of Research at Profitmart Securities, explained that Tata Motors' shares have been driven by the anticipation of strong returns resulting from the Tata Technologies IPO. As Tata Motors has offered its shares in the IPO and is expected to benefit from the net proceeds, the market is optimistic about the returns the auto company will generate from its investments in Tata Technologies. The strong brand image of Tata Technologies, built over a long period, further contributes to the positive outlook for the public issue.

Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi, expects further upside for Tata Motors shares. With the stock witnessing a decisive rally following a breakout at ₹470 to ₹480 per share levels, he advises current shareholders to maintain a trailing stop loss at ₹510 and hold the stock for next targets at ₹600 and ₹615.

Prospective Tata Technologies IPO Price

Regarding the expected price of the Tata Technologies IPO, Rajesh Sinha, Senior Research Analyst at Bonanza Portfolio, compared the company to Cyient, which operates in a similar business segment. He stated that based on Cyient's trading multiples, Tata Technologies could be valued at a 10 percent discount to arrive at an intrinsic value of ₹268 per share.

Tata Technologies IPO Details

On March 9, 2023, Tata Technologies filed the DRHP with SEBI for its IPO. The company plans to sell up to 9.571 crore shares, representing approximately 23.6 percent of its paid-up share capital through an offer for sale. The IPO comprises shares offered by existing shareholders, including Tata Motors, Alpha TC Holdings Pte, and Tata Capital Growth Fund-I. Tata Motors currently holds a 74.69 percent stake in the company, while Alpha TC Holdings Pte and Tata Capital Growth Fund-I hold stakes of 7.26 percent and 3.63 percent, respectively.