Tata Motors, India’s largest carmaker by revenue, is set to sell a 9.9% stake in its IPO-bound subsidiary Tata Technologies to US private equity firm TPG and Tata Trusts chairman Ratan Tata’s private endowment foundation for Rs 1,614 crore. This deal values Tata Tech, a company envisioned by Ratan Tata after he saw an opportunity in the evolving product engineering space, at Rs 16,300 crore.
The deal is part of Tata Motors’ deleveraging agenda and is expected to be concluded by October 27. RTEF and TPG Rise, a non-profit and an investment platform, aim to generate profits while creating a positive social impact.
The Tata Tech IPO, the first such offering from the Tata Group in 19 years, will see Tata Motors and other shareholders selling as much as 24% in the Rs 4,414 crore company. TPG Rise is already a lead investor in Tata Motors’ passenger electric vehicle unit.
What does this deal mean for Tata Technologies?
This deal is a significant development for Tata Technologies, as it will bring in new investors with expertise in impact investing and the automotive sector. This could help Tata Tech to accelerate its growth and expansion plans, particularly in the areas of electric vehicles and sustainable mobility.
What does this deal mean for the Tata Group?
The Tata Group is one of India’s largest and most respected conglomerates. This deal is a sign of the group’s commitment to divesting non-core assets and focusing on its core businesses. It is also a sign of the group’s confidence in Tata Technologies and its potential for future growth.
What does this deal mean for the Indian automotive sector?
The Indian automotive sector views the Tata Tech deal positively, indicating global investors’ interest in Indian companies with robust product engineering and sustainable mobility expertise. This could help to attract more foreign investment into the sector and boost its growth.
Conclusion
The Tata Tech deal is a significant development for the company, the Tata Group, and the Indian automotive sector. It is a sign of the growing interest in impact investing and sustainable mobility. The deal is also a testament to the strength of Tata Technologies and its potential for future growth.