Tata Technologies Ltd has decided to allocate a portion of its forthcoming initial public offering (IPO) to its employees and Tata Motors Ltd shareholders, as indicated in the latest update to its draft red herring prospectus.
According to a board resolution dated September 6, the allocation will include up to 0.5% of post-offer equity for employees and up to 10% for Tata Motors Ltd shareholders, with the shares distributed proportionally.
On June 28, the company received approval from the Securities and Exchange Board of India (SEBI) for its first IPO in nearly two decades. The IPO involves the sale of up to 9.57 crore equity shares by selling shareholders Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund I, representing 23.6% of the company’s paid-up share capital. In FY23, the company’s net profit increased by 42.8% to Rs 624.03 crore, up from Rs 436.9 crore in FY22.
Currently, Tata Motors holds a 74.69 percent stake in the company, while Alpha TC Holdings Pte holds a 7.26 percent stake. Tata Capital Growth Fund I has a 3.63 percent stake in the firm. JM Financial Ltd, BofA Securities, and Citigroup Global Markets India Pvt Ltd are the lead managers for the IPO.
Tata Technologies recently settled a case with SEBI regarding an alleged violation of disclosure and investor protection guidelines by paying a settlement amount of Rs 25 lakh. The settlement was reached after Tata Technologies submitted a proactive settlement application to SEBI, without admitting or denying any findings.
SEBI’s settlement order on September 27 states that proceedings related to the violations have been settled with respect to Tata Technologies. The company had made preferential allotments on multiple occasions between December 27, 2000, and March 13, 2008, resulting in shares being issued to more than 49 shareholders in a single financial year, which violated SEBI’s DIP guidelines.
