Tata Motors will sell a part of its stake in Tata Technologies through an initial public offer, the first by a group entity in 18 years.
Tata Motors on Monday said that its board has given its approval for a partial divestment of its investment in TataTechnologies, the product engineering and digital services firm, through the initial offer..
The last IPO from the$128-billion conglomerate was that of Tata Consultancy Services (TCS), which was listed on August 25, 2004.
“The IPO Committee... at its meeting held today (Monday), has accorded its in-principle approval to explore the possibility of partial divestment of the company’s investment in Tata Technologies Ltd(TTL) through an IPO at an opportune time.
“This will be subject to market conditions, applicable approvals, regulatory clearances (including observations from Sebi) and certain other considerations,’’ Tata Motors said in a regulatory filing postmarket hours.
Tata Motors held 74.43 percent of Tata Technologies in 2021-22.
Tata Technologies offers services such as engineering, research & development(ER&D) where it helps companies design better products.
The company was founded as a business unit of Tata Motors in 1989 and it began operations in 1996. Subsequently, in 2003, it moved its operations to Pune and later in 2006, it opened a global offshore delivery center in Thailand, according to its website.
Tata Technologies also acquired CEDIS Mechanical Engineering GmbH of Germany, a provider of automotive engineering and design, thereby strengthening its European client base. It achieved $321.5million in sales revenue for2020-21, which rose to $473.5million in 2021-22.
The company posted an operating profit of $88.5 million in 2021-22. According to theTata Motors’ annual report for 2021-22, its investment in Tata Technologies stood at Rs224.10 crore.
Last week, Tata Technologies had inaugurated its innovation centre in Toulouse, France, to cater to the global aerospace and defence sectors.
Shares of Tata Motors on Monday ended nearly flat at Rs 414.10 on the BSE ahead of the announcement.