Tata Motors is not planning to list its engineering solutions and IT product developing subsidiary Tata Technologies. Tata Technologies IPO could have been a huge value unlocking trigger for Tata Motors. Speaking at the automaker’s annual general meeting, Chairman Cyrus Mistry answered to a query from a shareholder while adding that the focus currently is on turning around Tata Motors’ operations. Tata Motors owns 70.4% equity stake in Tata Technologies.
We have no immediate plans for an initial public offer (IPO) for Tata Technologies. However, we will explore various options in the future
– Cyrus Mistry, Chairman, Tata Motors
Mistry also made clear that there are no plans to list the defense business. The Chairman said the flagship company’s business is going to increase in volatility. “We are all becoming used to unpredictable and dynamic market environments, learning to manage by anticipating customer needs, leveraging strong processes and building competitive product portfolios and networks,” said Mistry.
Earlier, media reports hinted the automaker was looking to bring the IPO of Tata Technologies and raise as much as INR14 billion (INR1,400 crore). Apart from Tata Motors, other investors in Tata Technologies are Mizuho Securities’ Alpha TC (8.7%), Tata Capital, Barclays Wealth Corporate Services, Sheba Properties, Tata Entertainment Overseas and Walbrook Nominees.
Established in 1994 as an in-house engineering solution firm, Tata Technologies has spread its operations beyond its parent and gets more than 30% of its revenues from North America, Europe and the Asia-Pacific region now. Apart from the automotive business which accounts for 65% of its top line, aerospace is also a focus area for Tata Technologies with 12% contribution to revenues. Tata Technologies posted a 3.6% increase in revenues in FY2016 to INR26.8 billion while profits grew 14.3% to INR3.8 billion.
Mistry’s comments make it pretty clear that Tata Technologies IPO is not happening anytime soon. However, there are plenty of upcoming IPOs for retail investors to look forward to. This list includes RBL Bank whose IPO is lined up to open for subscription on 19 August.