Tata Motors Board Gave in-principle Approval To Partially Sell Its Stake in Tata Technologies Through an Initial Public Offer

Tata Motors’ Board Gave In-principle Approval to Partially Sell Its Stake in Tata Technologies Through An Initial Public Offer

December 12, 2022: “We would like to inform you that the IPO Committee duly constituted by the Board of Directors of Tata Motors Limited, in its meeting held today, i.e., on December 12, 2022, has given its in-principle approval to explore the possibility of partial divestment.

Subject to market conditions, applicable approvals, regulatory approvals (including observations of the Securities and Exchange Board of India) and certain other matters, the company’s investment in the company’s subsidiary Tata Technologies Ltd through the IPO route at the appropriate time, Tata Motors said in a BSE filing.

Earlier reports said that the Tata Motors subsidiary is looking to raise funds through an IPO in the first quarter of the financial year 2023-24 (FY24).

The company is likely to file a draft red herring prospectus (DHRP) with capital markets regulator Securities and Exchange Board of India (SEBI) in the next quarter.

Tata Motors’ global product engineering and digital services subsidiary is in discussions with merchant bankers for the proposed offer, sources had earlier told ET Now.

The planned equity offer from Tata Technologies is likely to be a mix of share sale and fresh equity offer.

The company is likely to sell a minimum 10% stake through an equity offer. Tata Motors is the largest shareholder in Tata Technologies, holding a 72% equity stake in the company.

The rest is owned by other Tata Group entities and Alpha TC Holdings, a Singapore-based investment firm backed by Mizuho Securities.

The offer is likely to be the first IPO of a Tata Group firm since 2004, when tech giant TCS listed its shares.

Another Tata Group company Tata Play, formerly Tata Sky, became the first company to use the confidential ‘pre-filing’ route offered by SEBI to file initial public offer (IPO) documents with the regulator.

The direct-to-home (DTH) company filed documents with SEBI, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on November 29.

The confidential pre-filing route allows companies to submit documents to regulators for an IPO without including sensitive business information.

This option allows companies to withhold documents from public scrutiny until the IPO is officially launched.

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