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Tata Technologies Raises Rs 141Cr From Tata Capital, Alpha TC Holdings

By Pallavi S

  • 03 May 2011

Tata Technologies, specialising in engineering services outsourcing and product development IT, has raised Rs 141.06 crore ($30 million) by selling 13.04 per cent stake to Mizuho Securities-backed Alpha TC Holdings Pte and group private firm Tata Capital Growth Fund I.

The deal values the unlisted subsidiary of Tata Motors Ltd, at Rs 1,080 crore ($245 million) or around 7 times its operating profit and just a little less than 12 times its consolidated net profit for the year ended March, 2010.

“Tata Technologies has strong expertise in manufacturing-related verticals, positioning it in the sweet spot of the third wave of outsourcing,” said Akhil Awasthi, Managing Partner of Tata Capital Growth Fund.

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Tata Motors held around 81 per cent in Tata Technologies as of March, 2010, and its holding is estimated to whittle down to around 70 per cent post fund-raising.

According to a report in Business Standard some unnamed minority shareholders, who apparently bought shares from the employees of the unlisted company, alleged that the shares had been sold at a discount to the investors to benefit the promoter group firm. Shares have been offered at Rs 251 a piece, compared to off-market transactions of the shares at around Rs 450-500 that puts the current value of the firm (pre-dilution) at around Rs 1,683-1,870 crore ($382.5 million-$425 million).

Founded in 1989, Tata Technologies provides full-vehicle development capabilities with an offshore engineering engagement model to reduce cost. Its revenue has doubled over the past five years and its profits have grown by over 11 times.

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It has offices in 11 countries with delivery centres in India (Pune), the USA (Novi, Michigan), the UK (Coventry) and Thailand (Bangkok) with the global headquarters in Singapore. The company has a combined global workforce of more than 4,500 employees working from Tata Technologies facilities, as well as client sites.

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