India's Tata Technologies jumps three-fold in trading debut, valued at nearly $7b

December 01, 2023 00:00:00

BENGALURU, Nov 30 (Reuters): Shares of India's Tata Technologies jumped as much as 180 per cent on their trading debut on Thursday, valuing the first Tata Group company to go public in nearly two decades at 567.94 billion rupees ($6.8 billion).

The Tata Motors' unit, which provides engineering and technology services to auto, aero and heavy machinery makers, surged past the initial public offer (IPO) price of 500 rupees to debut at 1,200 rupees and rose to as much as 1,400 rupees.

If gains hold, Tata Technologies is on track to post the biggest jump for domestic listings so far this year as well as among the best ever listing-day gains in India, according to LSEG data.

Pharmaceutical company Sigachi Industries and Paras Defence & Space had climbed as high as 270 per cent and 171 per cent, respectively, on listing in 2021, Aditya Kondawar, Vice President of Complete Circle Capital, said. Financial services firm Religare Enterprises had risen 214 per cent on its debut day in 2007, as per LSEG data.

Tata Technologies' "listing was beyond imagination... and post that, the rally to 1,400 rupees was even more unexpected," Arun Kejriwal, founder of Kejriwal Research and Investment Services, said, adding that short-term investors could book profits.

The company's future earnings through a part of financial year ended 2025 appear to have been discounted at the current valuation, Kejriwal added.

Tata Technologies' valuation has topped that of its peers KPIT Technologies, L&T Technology Services and sister Tata Group company Tata Elxsi, which are valued between 409 billion rupees and 524 billion rupees.

India has seen a record 196 IPOs so far this year, with share benchmarks scaling record highs on improving economic growth prospects and a vast consumer base.

Investors oversubscribed Tata Technologies' IPO by 69.43 times, the most demand seen in string of IPOs last week.

IT services provider Tata Consultancy Services, which listed in 2004, was the last Tata Group company to go public.