The Tata Group is actively considering listing Tata Autocomp Systems (TACO), its auto components manufacturing business, through an initial public offering (IPO), according to a report by MoneyControl. According to reports, discussions in the early stage are focused on determining the entities within the Tata Group that will divest their stakes in TACO and the overall quantum of stake to be divested in the IPO.
Established in 1995, TACO serves as the vehicle for the Tata Group's ventures in the auto components sector. Tata Autocomp Systems is wholly owned by Tata Group entities, with Tata Sons holding approximately 21 per cent, and the remaining stake held by Tata Industries Ltd.
This news comes after Tata Motors' subsidiary, Tata Technologies, had finalised the offer price, including the anchor investor offer price, at Rs 500 per equity share for its IPO in November 2023. Tata Technologies, specialising in engineering and product development digital services, marked the first IPO from the Tata Group in nearly two decades after Tata Consultancy Services in 2004.
Tata Technologies' IPO amounted to Rs 3,042.5 crore, witnessed substantial institutional buyer participation, and was oversubscribed 69.43 times by the final day of subscription.
While the Tata Group explores the IPO option for Tata Autocomp Systems, further details regarding the timing, valuation, and specific entities divesting their stakes are expected to emerge as the discussions progress. The move aligns with Tata Group's strategic initiatives to expand its presence in the competitive auto components market and unlock value through public offerings.
TACO is a leading player in the auto component sector. It produces segments including interior plastics and composites, radiators, exhaust systems, batteries, stampings, suspensions, seating, mirror assemblies, EV powertrains, EV battery energy storage systems, and engine cooling systems.
In August 2023, the company also signed an initial pact with Skoda Group to produce components for the railways, metro and bus segments. Through this partnership, the auto component arm of Tata Group aimed to expand into the growing Indian railway and public mobility market.
