Tata Technologies made a stellar stock market debut on Thursday, with its shares closing over 140% higher than its IPO issue price of Rs 500 per share. The stock opened at Rs 1,200, over 2X its issue price, on the National Stock Exchange before surging to an intraday high of Rs 1,400 per share.
A record setter
This robust debut makes Tata Technologies the seventh-highest listing day return in India’s history and values the company at over $7 billion. According to a Nov. 30 The Hindustan Times report, the overwhelming investor interest and gains reflect Tata Technologies’ strong fundamentals and growth prospects.
The company provides engineering and design services to auto manufacturers and has key clients like Tata Motors and Jaguar Land Rover. It has benefitted from the global push towards electric vehicles, with Vietnam’s Vinfast emerging as a major customer. Tata Technologies already derives 70% of its revenue from the high-growth auto engineering sector.
In the financial year 2023, Tata Technologies reported a 43% rise in net profit along with a 25% revenue growth. Its focus on high-margin digital engineering services and solutions has further boosted profitability.
The enthusiastic response to Tata Technologies’ IPO is also indicative of the prevailing positive market sentiment. The issue was oversubscribed nearly 70 times, with total bids worth Rs 1.56 lakh crore received against the base issue size of Rs 2,200 crore.
First Tata firm to launch an IPO in 20 years
Tata Technologies is the first Tata group firm to launch an IPO in nearly 20 years after TCS went public in 2004. Its successful debut highlights investors’ confidence in the Tata brand name and India’s booming IPO market.
India has already seen a record 196 IPOs raise capital this year, with companies riding on the back of improving economic prospects and a vast consumer base.
According to market expert Arun Kejriwal, Tata Technologies’ valuations seem to have already discounted earnings expectations for the next 2-3 years. Short-term investors can look to book profits following the exponential listing gains.
Featured Image Credit: Tima Miroshnichen; Pexels