Investment for Tata Technologies’ IPO is sought by US funds and Morgan Stanley

According to two people with firsthand knowledge of the situation, India’s Tata Technologies is in discussions to raise capital for its initial public offering at a valuation of $2.5 billion with Morgan Stanley Investment Management, Blackrock, and several US hedge funds.

The organization, which is a part of the conglomerate Tata Group, offers engineering services to businesses, including those in the aerospace and automotive industries. An automaker and steel company among the several listed businesses in the Tata Group, this will be the company’s first initial public offering (IPO) in twenty years.

Tata Technologies is in discussions with Blackrock, Morgan Stanley, and U.S. asset managers Ghisallo Capital, Oaktree Capital, and Key Square Capital on potential involvement in the deal ahead of its anticipated $350-375 million initial public offering (IPO).

Tata and the other investors did not reply to calls for comment, and Oaktree declined to comment.

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These funds have their eye on Tata’s “anchor book,” which is where prominent institutional investors receive shares before retail and other investors can subscribe. The valuation and these investor conversations were originally reported by Reuters.

“Big investors are quite excited by the Tata brand, and a profitable company with scale … that’s driving demand,” the initial source stated.

According to the negotiations, Tata Technologies is currently valued at $2.5 billion, which is around 25% more than it was when TPG acquired a 9.9% share in the company during a pre-IPO financing last month. The first source attributed the rapid valuation increase to “more investor interest than expected” in Tata’s proposal to sell a 14–15% stake in the IPO.

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According to both reports, the offer would go live for subscriptions around November 21. This might be India’s largest initial public offering (IPO) of the year, following Blackstone-owned Nexus Malls and condom manufacturer Mankind. By late November, the business believes, the stock will begin trading.

According to draft IPO documents submitted with the regulator in March, Tata Technologies’ profit for the nine months ended December 31, 2022, increased by 23% to 4,074 million rupees ($48.9 million), while its overall income increased by 15% to 30.5 billion rupees.