What is your view on Tata Technologies? It is a must subscribe, but post that, is it a must buy even if there is a gap up listing?
The Tata Technologies IPO garnered significant attention following the filing of its DRHP and today it has made its debut on Dalal Street. The earnings valuation is relatively cheap. We can also say that the IPO has an attractive and not an aggressive valuation. So, with a long-term perspective, we can subscribe to the IPO even after a big gap up because the Tata Group has its name as its legacy.
Would you advise your clients to buy it even if there is a gap up listing of 20-30% because not everybody will get lucky when it comes to allocation?
Yes, if the investors are investing in the Tata Technologies IPO with the motive of listing gains, then they should not enter the IPO if there is a big gap up. But if they are entering with a long-term perspective, then the IPO is worth investing for the investors. The investors should not miss this opportunity.
What is going to be the three-year or four-year outlook for Tata Tech IPO? Could it do what Tata Elxsi has done, what KPIT has done? What is the benchmark according to you?
The company has diversified global presence. The client portfolio includes Tata Motors, JLR, Airbus, McLaren, Honda, Ford, etc. Global spending on the ER&D segment it operates in is expected to grow at a compound annual growth rate of 10% over the next five years. Tata Tech is the only Indian firm and among a handful globally that serves automotive clients in every stage of product’s life cycle from the drawing board to the showroom floor. Now as the firm is expanding into aerospace to anchor clients, the long-term perspective looks attractive for Tata Technologies also.