January 8, 2024
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Tatas for public listing of Tata Autocomp Systems??
According to market sources, the Tata Group is planning to list Tata Autocomp Systems, the group’s auto components manufacturing business, with the formal process expected to begin later this year. TACO was founded in 1995 and operates as the vehicle for the group’s ventures in the auto components business.
According to the market sources, the discussions are at an early stage and talks are currently focused on Tata Group entities that will divest their stakes in the company and also the overall quantum of stake which will be divested in the IPO.
TACO is owned fully by Tata Group entities with direct holding by Tata Sons, which owns around 21 percent while the remaining is held by Tata Industries Ltd.
Previously, in 2011, the Tata Group had planned to raise Rs 750 crore for the company from the capital market and had also received the Securities and Exchange Board of India’s approval for the same. The group later withdrew the IPO, possibly due to unfavorable market conditions, although it did not specify any reason at that time.
The market conditions are far better now and as a company TACO has come a long way.
It is also possible that the group may want to bring in an investor before the IPO as it did in the case of IPO bound Tata Technologies in which Tata Motors a part of its stake to global private equity fund TPG group.
A Tata Group spokesperson declined requests for comment.
TACO is one of the leading players in the auto component industry and is present in product segments such as interior plastics and composites, radiators, exhaust systems, batteries, stampings, suspensions, seating, mirror assemblies, EV powertrains, EV battery energy storage systems, and engine cooling systems.
Its revenues have increased by approximately 57 percent on-year to Rs 14,372 crore during 2022-23 with strong volume growth. According to the Auto sector analysts, the company’s turnover is expected to continue to grow at mid-to-high double digits on the back of capacity ramp-up of components specifically catering to the EV segment.
TACO is expected to step up capital expenditure investments over the medium term towards capacity enhancement and new product launches, which may be funded largely through internal accruals.
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