Tata Tech IPO: Following TCS’s Footsteps, Will Tata Tech Also Distribute Dividends? A Look at the Company’s Track Record
Tata Tech IPO
Tata Tech IPO: Dividend Record and Unlisted Shares Analysis
The much-anticipated Tata Tech IPO has stirred significant market discussions as a Tata Group company prepares to list after nearly 19 years.
TCS, another Tata Group entity, set a remarkable precedent when it was listed in 2004, delivering substantial profits to investors not only through stock appreciation but also through generous dividends and bonus offerings.
Investors are now curious to know if Tata Tech will follow a similar trajectory and maintain an excellent dividend record.
TCS’s Dividend Record: A Benchmark to Consider
TCS has long been admired for its outstanding dividend record. In the current financial year, the company has declared its first interim dividend of Rs 9 per share.
For the previous fiscal year 2022-23, TCS distributed a total dividend of Rs 115 per share, which included interim dividends (Rs 8, Rs 8, Rs 8), a special dividend (Rs 67), and a final dividend (Rs 24).
The company’s commitment to rewarding shareholders has played a crucial role in bolstering investor confidence and attracting long-term investors.
Tata Tech’s Dividend Distribution: A Closer Look
In the unlisted market, Tata Tech has also demonstrated a commendable dividend distribution record.
As per its Annual Report for FY 2022-23, the company announced a dividend of Rs 12.30 per share for FY 2023, amounting to a total dividend distribution of Rs 498.97 crore.
It is noteworthy that Tata Tech did not distribute any dividends in the preceding two financial years, 2021 and 2022.
However, in FY 2020, the company paid a dividend of Rs 40 per share, Rs 15 in 2019, Rs 30 in 2018, Rs 40 in 2017, Rs 35 in 2016, and a substantial Rs 75 in 2015. The face value of Tata Tech’s shares is Rs.
Distinguishing Dividend Distribution in Unlisted Companies
The process of dividend distribution in unlisted companies like Tata Tech differs slightly from that of listed companies.
In listed companies, dividends are directly credited to shareholders’ accounts. However, in the case of unlisted companies, the process can vary, and shareholders may need to initiate the withdrawal process to access their dividends.
As per Tata Tech’s annual report for FY 2022-23, if the dividend is not withdrawn within seven years from the time of transfer to the company’s unpaid dividend account, it is transferred to the Investor Education and Protection Fund (IEPF).
The shares associated with this unpaid dividend are transferred to the demat account of the IEPF Authority. To retrieve these shares, shareholders must submit an application to the IEPF.
Tata Tech IPO Details: Offer for Sale (OFS)
The Tata Tech IPO will be entirely an Offer for Sale (OFS), with no new shares issued. The issue will consist of 9.57 crore shares, out of which Tata Motors will sell 8.11 crore shares, Alpha TC Holdings will sell 97.2 lakh shares, and Tata Capital Growth Fund 1 will sell 48.6 lakh shares from its holding.
Examining Their Stakes: Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund 1
As of now, Tata Motors holds a significant stake of 74.69 percent in Tata Tech, followed by Alpha TC Holdings at 7.26 percent, and Tata Capital Growth Fund 1 at 3.63 percent.
Tata Motors acquired its shares at an average price of Rs 7.40, while Alpha TC Holdings and Tata Capital Growth Fund 1 secured their stakes at an average price of Rs 25.10 each.
Tata Tech’s Growth Trajectory and Industry Prospects
As Tata Tech gears up for its IPO, market enthusiasts are keen to evaluate the company’s growth trajectory and the prospects of the industry it operates in.
Tata Tech’s presence in the technical textile sector positions it advantageously to capitalize on the rising demand for innovative and high-performance textile solutions across various industries.
The technical textiles market has been witnessing steady growth, fueled by advancements in technology and changing consumer preferences.
Industries such as automotive, construction, healthcare, agriculture, and protective apparel heavily rely on technical textiles for their unique characteristics, including durability, strength, and flexibility.
Tata Tech, with its expertise in manufacturing PP non-woven fabrics in various sizes and densities, is well-positioned to cater to these diverse industry segments.
Moreover, the trend of sustainability and environmental consciousness is gaining traction globally. Companies that embrace eco-friendly practices and incorporate sustainable measures into their operations are being viewed more favorably by investors and customers alike.
Tata Tech’s commitment to commissioning a solar plant aligns with these sustainability goals and can enhance its market reputation, especially in an era where ESG (Environmental, Social, and Governance) factors play a significant role in investment decisions.
Analyzing Investor Sentiment and Long-Term Potential
The anticipation surrounding Tata Tech’s IPO has sparked curiosity among investors about the company’s long-term potential.
As an unlisted company, Tata Tech’s dividend distribution track record and performance indicators provide valuable insights into its financial stability and growth prospects. Investors are carefully assessing these factors to make informed decisions about participating in the IPO.
Tata Tech’s dividend history showcases a mix of distribution over the years, and the recent announcement of Rs 12.30 per share for FY 2023 indicates the company’s intention to reward shareholders.
While the dividend distribution in unlisted companies follows a different process, shareholders have avenues to access their dividends.
As the IPO offers an exit opportunity for existing stakeholders like Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund 1, retail investors view it as a chance to align their investment portfolios with a reputed Tata Group entity.
Tata Tech’s presence in the technical textiles industry, coupled with the Tata brand’s credibility, attracts investors who seek long-term growth potential and stable returns.
Tata Tech’s IPO Roadmap and Investor Outreach
As the IPO journey unfolds, Tata Tech is embarking on a series of investor outreach initiatives to create awareness about its business model, growth strategies, and financial performance.
Roadshows, virtual investor conferences, and interactions with financial analysts are key components of the company’s investor outreach program.
During these engagements, Tata Tech’s leadership team emphasizes the company’s commitment to sustainable growth, its focus on innovation, and the potential for expanding its product portfolio.
The management also highlights the industry’s growth potential, underlining how Tata Tech aims to capture emerging opportunities and establish itself as a formidable player in the technical textile market.
In parallel, analysts and market experts are scrutinizing Tata Tech’s financial statements, scrutinizing its revenue streams, profitability margins, and future expansion plans.
Their assessments will play a pivotal role in shaping investor sentiment and influencing subscription trends for the IPO.
Conclusion
Tata Tech’s upcoming IPO presents a remarkable opportunity for investors to be part of a Tata Group company’s growth story after almost two decades.
The dividend distribution track record and the industry’s growth prospects position Tata Tech as a prospective investment option for those seeking exposure to the technical textiles sector.
With investor sentiment buoyed by the success of TCS and Tata Group’s reputation for excellence, Tata Tech’s IPO holds considerable promise.
As the IPO progresses, investors will closely evaluate the company’s fundamentals, growth strategies, and commitment to shareholder value before making investment decisions.
The IPO launch signifies a milestone in Tata Tech’s journey, and the company aims to leverage the capital raised to fuel expansion, strengthen market presence, and enhance shareholder value.
As investors eagerly await the IPO’s outcome, Tata Tech’s growth trajectory and ability to deliver dividends will be closely watched, making it an intriguing offering for investors seeking long-term value and sustainable growth opportunities.
