BigBasket to Tata Capital IPOs: A look at upcoming initial public offers of Tata Group firms
Upstox
3 min read • Updated: March 27, 2024, 6:04 PM
Summary
The Tata Group has been aggressively looking to expand its presence in new-age sectors such as digital, retail, semiconductors and EV. The salt-to-software conglomerate is poised to witness as many as 8 public issues for its group firms in the next 2 to 3 years, according to reports.
The Tata Group launched an initial public offer (IPO) after a gap of 19 years with the public issue of Tata Technologies Ltd in November 2023. Prior to that, the Tata Group's last IPO was Tata Consultancy Services (TCS), launched in 2004.
It appears that the Tata Group is not going to wait for a long time before bringing more IPOs for its constituent firms. The salt-to-software conglomerate is poised to witness as many as 8 public issues for its group firms in the next 2 to 3 years, according to reports.
Several Tata Group companies like Tata Capital, Tata Autocomp Systems, BigBasket, Tata Digital, Tata Passenger Electric Mobility, Tata Electronics, Tata Housing and Tata Batteries are preparing to enter the capital market, reports suggest. The Tata Group has been aggressively looking to expand its presence in new-age sectors such as digital, retail, semiconductors and EV.
Tata Sons, the holding company of Tata Group entities, likely to give exit opportunities to existing investors, reports suggest.
A Tata Group executive was quoted in a report stating that many of the conglomerate's businesses were established over 20 or 25 years ago and are now in a growth phase, poised to be monetised. Calculated decisions are being made by specific companies in discussions with Tata Sons. These decisions are aimed at either offering exit opportunities to existing investors or unlocking value. There are no deadlines; the decisions will be well thought out.
Tata Group's focus largely on India-centric growth
According to reports, Tata Group is putting more emphasis on India-centric growth unlike the focus on overseas growth earlier. The group is making bold investments in businesses with significant scaling potential.
The Tata Group announced plans in 2022 to invest $90 billion in emerging industries by 2027, covering areas such as mobile components, semiconductors, electric vehicles, batteries, renewable energy and e-commerce. However, according to a report, the Tata Group is poised to surpass that level, aiming for investments exceeding $120 billion in the coming years.
Tata Motors is considering splitting its passenger and commercial vehicle businesses into two listed companies to unlock the value of its electric vehicles and the Jaguar Land Rover luxury car-making unit.
The commercial vehicles business, including the manufacturing of trucks and buses, and its related investments, will be housed in one entity, according to a filing by the company. The second company will have passenger cars, electric vehicles, Jaguar Land Rover and its related investments.
Here’s a look at the proposed IPOs of the Tata Group companies:
Tata Sons IPO expected next year
The holding company of Tata Group is contemplating a mega IPO before September 2025, according to reports. This decision comes in response to stringent Reserve Bank of India guidelines for non-banking finance companies.
With an estimated valuation of ₹11 lakh crore, Tata Sons is reportedly considering divesting around 5% via the IPO, amounting to approximately ₹55,000 crore, according to reports. The last time the market witnessed such a significant IPO was the LIC IPO, valued at ₹21,000 crore.