Tata Technologies Ltd., the first company from the salt-to-software conglomerate to list since 2004, more than doubled in its trading debut in Mumbai, providing a further boost to India's busy market for initial public offerings.
The shares gained as high as 1,400 rupees (Dh62), versus an offer price of 500 rupees (Dh22). The company's 30.4 billion rupees ($365 million) initial share sale was oversubscribed 69 times last week, as investors piled into the engineering research unit of Tata Motors Ltd., the maker of Jaguar and Land Rover cars.
The IPO comes as India logs a record number of listings in 2023, fueled by a booming stock market and optimism about the country's economic growth. The frenzy reached a fever pitch last week when first-time share sales from five issuers, including Tata Technologies, garnered a combined 2.5 trillion rupees in application amount.
"Strong optimism in the domestic market has fueled the surge in IPO listings in the last two years," Jahnavi Prabhakar, an economist at Bank of Baroda wrote in a note 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 mostly been small - only two raised more than $500 million - about 80 per cent of the newcomers are trading above their offer prices versus 62 per cent in Asia. Indian Renewable Energy Development Agency Ltd., a state-run lender to renewable energy projects, surged 88 per cent in its trading debut Wednesday.
Tata Technologies provides engineering research and development services along with product development and digital solutions to global OEMs and their key suppliers. The company is looking to expand into aerospace, transportation and electric vehicles.
Its automotive business delivers about 70 per cent of sales, with Tata Motors and JLR among key clients and Vietnam's Vinfast emerging as a major customer.
