India’s Tata Technologies is in talks with Morgan Stanley Investment Management, Blackrock and some US hedge funds to invest in its $2.5 billion IPO, two sources with direct knowledge of the situation said.
The company, part of the Tata Group conglomerate, provides engineering services to companies in the automotive and aerospace sectors, among others. Its IPO will be the first in twenty years for a company from the Tata group, which has many listed companies, particularly in the automobile and steel sectors.
Ahead of its planned $350-375 million IPO, Tata Technologies is in talks with US asset managers Ghisallo Capital, Oaktree Capital and Key Square Capital, as well as Blackrock and Morgan Stanley, for possible participation in the transaction .
Oaktree declined to comment, while Tata and the other investors did not respond to requests for comment.
These funds are interested in what is known as the Tata anchor book, in which high-profile institutional investors receive shares before subscription is open to individuals and other investors. Reuters is the first to report these investor discussions and the valuation.
“Big investors are very excited about the Tata brand and the fact that the company is profitable and has scale, which is driving demand,” the first source said.
The discussions put the value of Tata Technologies at $2.5 billion, about 25% higher than last month, when TPG acquired a 9.9% stake in a pre-market fundraising round.
The IPO will be open for subscriptions around November 21, the two sources said, in what could be one of India’s biggest IPOs this year after those of condom maker Mankind and Blackstone-owned Nexus Malls. The company expects the shares to debut on the stock exchange at the end of November.
In the nine months ended December 31, 2022, Tata Technologies’ profit increased 23% to 4,074 million rupees ($48.94 million), while its total revenue increased 15% to 30.5 billion rupees ( US$366.37 million), according to preliminary IPO documents. presented to the regulator in March.