Tata Technologies

Tata Tech is planning an IPO. It is a well-run company in a very interesting space. Here is a brief overview of the company’s business.

About the company

Tata Technologies Limited is an engineering and product development services company that provides engineering solutions and services to various industries such as aerospace, automotive, industrial machinery, and consumer goods. The company is a subsidiary of Tata Motors, a part of the Tata Group, one of the largest conglomerates in India. Tata Technologies was founded in 1989 and is headquartered in Pune, India.

Tata Technologies’ revenue is primarily generated from its engineering services business, which accounts for around 60% of its total revenue. The company’s key clients in this segment include Tata Motors, Jaguar Land Rover, and Airbus. The remaining revenue comes from its product development business, which includes the development of products such as automotive components and consumer goods.

Tata Tech’s competitive advantage lies in its deep engineering expertise and its ability to provide end-to-end product development solutions to its clients. The company’s engineering services are spread across the entire product development cycle, from conceptualization to product launch, and it has a strong track record of successfully delivering complex projects to its clients.

It also has a global presence, with operations in over 20 countries, including the US, UK, Germany, China, and India. The company’s global delivery model enables it to provide cost-effective engineering solutions to its clients while leveraging the best talent worldwide.

The financial performance has been consistent over the past few years. The company reported a 25.1% growth in revenue to 4,414.18 crs in FY 2022-23 as against 3,529.57 crs in FY 2021-22. Revenue from the sale of services increased by 33.2% to 3,535.22 crs in FY 2022-23 compared with 2,654.84 crs in FY 2021-22.

Profit before Tax (PBT) stood at 796.15 crs during FY 2022-23 compared with 586.83 crs during the previous financial year, registering an increase of 35.7%. Profit after Tax (PAT) increased by 42.8% to 624.03 crs in FY 2022-23 compared with 436.97 crs in FY 2021-22.

The engineering and product development services industry is expected to grow rapidly in the coming years, driven by increasing demand for engineering solutions and services from various industries. According to a report**, the global engineering services outsourcing market is expected to grow from $204.9 billion in 2021 to $316.8 billion by 2026, at a compound annual growth rate (CAGR) of 9.1%.**


It has deep expertise in the automotive industry. Its comprehensive portfolio of services addresses product development and enterprise optimisation needs of traditional OEMs and new energy vehicle companies. It has differentiated capabilities in EVs, which are the new-age automotive trend. The company provides end-to-end solutions for manufacturing, development, and after-sales services for EVs.

The company possesses strong digital capabilities bolstered by proprietary accelerators. These are designed to help OEMs and tier 1 suppliers manage their entire digital product life cycle and engage their customers throughout the product journey.

It has a global delivery model that enables intimate client engagement and scalability.

It has a proprietary e-learning platform that helps them leverage their manufacturing domain knowledge, allowing them to tap into large upskilling and reskilling markets.


The concentration of revenue with top 5 clients: The business derives a material portion of its revenues from its top 5 clients as per revenue generated in Fiscal Year 2022. If any or all of these top 5 clients face any deterioration in their business, it could adversely affect the company’s financial position, cash flows, and results of operations.

The revenue is dependent on clients concentrated in the automotive sector: Any economic slowdown in this segment can adversely impact the financial condition and operations of the business. The company expects a significant inflow of future revenue from new energy vehicle companies, many of which may be start-ups. There can be uncertainties about their funding plans, future roadmaps, growth capabilities, creditworthiness, and ownership changes.

Failure to attract and retain talent: The success of the company is largely dependent on its skilled engineers and management team. Failure to retain and attract talent may decline in profitability. An increase in wages and employee benefits can prevent the company from maintaining its competitive advantage.

Protection of intellectual property: The company may be subject to third-party or client claims of intellectual property infringement. It may also be unsuccessful in protecting its intellectual property rights.

The company has recently expanded its offerings to the education business. If it is unable to achieve the anticipated returns, it may have a material effect on its financial condition and operations.

Global collaboration model:

Their Global Delivery Execution Model (GDEM) is designed around the ‘follow the sun’ workflow. Project teams collaborate across off-shore and on-site locations worldwide, integrating seamlessly to deliver maximum progress and efficiency for every project. When a Swedish automotive business collaborated with them for their first plug-in hybrid sports car, Tata leveraged its off-shore team in India to support the team in Sweden and UK while engineering this carbon fibre-based award-winning product for global markets. Off-shore teams can develop or directly connect with existing company-wide systems to engineer products, execute manufacturing and manage resources. On-site team members liaise between the customer and off-shore teams, assign resources, manage the people supply chain, review projects and report on KPIs.

Industries that Tata Technologies works in:

  • Automotive Industry
  • Industrial Heavy Machinery
  • Aerospace Industry
  • Education Industry

Automotive Industry:

The automotive industry is embracing an unprecedented transformation as companies focus on launching new products faster. The race is on to adapt, innovate and deliver a connected, autonomous, shared, and electric future.

Their deep manufacturing domain knowledge and understanding of the physical and digital layers of product engineering enables them to deliver end-to-end solutions that helps manufacturers launch competitive products, optimize operations, and improve customer journeys.

Their automotive offerings cover the entire product value chain across automotive engineering, manufacturing, and customer experience areas. This includes outsourced turnkey electric vehicle engineering solutions, product benchmarking, rightweighting, simulation and validation, embedded systems, AUTOSAR, hardware-in-the-loop validation as well as connected and autonomous vehicle solutions. Their digital enterprise offerings enable digital transformation of entire operations, digital twin, digital thread, manufacturing engineering, and Industry 4.0 solutions aimed at helping companies manufacture products faster and optimize the cost of operations.

Business Challenges Solved in Automotive Industry by Tata Technologies:
  • Develop more competitive products and solutions
  • Reduce product time to market
  • Optimize product development costs
  • Enable the electrification of your product portfolio
  • Improve customer experience
  • Enable end-to-end visibility across the product lifecycle
End-to-End Electric Vehicle (EV) Engineering Solutions:

Their end-to-end solutions for future EVs cover engineering, manufacturing, and post-sales service to deliver a great experience to the digital customer of the future and help manufacturers perform in the marketplace.

Turnkey Full Vehicle Development Solution for Automotive:

Their TREaD (Turnkey Research, Engineering, and Development) framework offers outsourced full-vehicle development solutions, from concept to reality, helping companies launch competitive vehicles faster.

Embedded Engineering Solutions:

Their embedded engineering solutions cover the entire V cycle of product software development covering application development – MBD, SIL, MIL and HIL, & platform software – AutoSAR, SDV and bespoke platforms, complemented by our mechatronics DNA.

HIL Testing & Validation Solutions:

Their Hardware in the Loop (HIL) testing and validation solution help manufacturers develop reliable products and optimize product testing time and cost, thereby helping them launch competitive products with agility.

Model-based Systems Engineering Solutions:

Their Model-based Systems Engineering (MBSE) solution is designed to enable companies to bridge gaps between physical and digital product designs and bring in a new level of visibility, connectivity, and traceability across every aspect of the system lifecycle.

Digital Transformation Solutions

Their digital transformation solutions cover the key areas of digital product development, digital supply chain, digital manufacturing, and digital customer experience. It enables enterprises to connect the digital thread and become smart, intelligent, and connected enterprises for the new normal.

Digital Manufacturing Solutions:

Their digital manufacturing solutions help manufacturing companies adopt Industry 4.0 technologies across their product development value chain and manufacture competitive products while optimizing cost and improving productivity.

Digital Customer Experience Solutions:

Their digital customer experience solutions enable companies to manage their entire omnichannel customer journey offering the flexibility of virtual product interaction with the convenience of buying products online, enabled through digital applications and mobile apps.

Enterprise transformation SAP S/4 HANA Solutions:

Their SAP S/4 HANA enterprise implementation and transformation solutions are designed to help organizations seamlessly implement, migrate & upgrade to SAP future-ready ERP platform leveraging their extensive ERP experience, accelerators, and tools.

eVMP (Electric Vehicle Modular platform):

Their smart, parametric, and modular electric vehicle platform enables manufacturing companies to launch better products faster by reducing time to market by up to 6-12 months while optimizing platform development time and cost. Its offers one-click scalability for rapid configuration, compliance with various safety norms, and scalability across vehicle sizes.

RightWeighting 5R:

Their 5R Rightweighting methodology enables manufacturing companies to optimize product weight and engineer products that deliver the right performance at the right price, by applying the right amount of the right material in the right place.


Their agile product data and program management tool with 12+ modules for end-to-end ER&D process tracking enables OEMs to enhance data visibility across the product development lifecycle and ensure timely and effective program management for the launch of competitive products.


Their manufacturing execution system tool enables manufacturing companies to ensure real-time data visibility of planned manufacturing operations helping them improve operational efficiency and productivity.


AMP.IoT is a suite of modular applications designed to cater to the Industrial IOT requirements of the manufacturing industry. It offers features like asset tracking, enhancing OEE, predictive analytics, plant benchmarking and monitoring, digital work instructions, and remote monitoring helping companies improve shop floor-to-top floor coordination, and manufacture better products.

CHIP (Centralized Hybrid Integration Platform):

CHIP is an enterprise hybrid integration ecosystem designed to enable manufacturing companies to connect and maps applications, data, and devices in the cloud and on-premises on a unified, extensible platform. Built on open source, the frameworks enable companies to integrate existing applications, improve data visibility, and ensure better efficiency and productivity.

Power of 8:

Their power of 8 suites of modular digital applications is designed to enable OEMs to manage the entire Omni channel customer and dealer journey starting from customer leads to showroom visits, to sales and post-sales service experience.

TRACE (Tata Technologies Rapid Connected Environment):

Their IoT-led connected vehicle platform enables them to develop & deliver end-to-end connected services for passenger vehicles, commercial vehicles, and industrial heavy machines, as well as telematics solutions for fleet management. Deployed on over 7000+ vehicles, it enables manufacturing companies to deliver a great user experience.


Their digital accelerator Visimatic is an enterprise-ready suite of machine learning solutions for different vertical businesses, empowering data scientists and business users to accelerate time to value.

Industrial Heavy Machinery

Improving prediction accuracy:

Turn your data into intelligent information. Their automated reporting and real-time analytics enable you to predict potential hurdles throughout the product lifecycle and make strategic decisions faster.

Enable end-to-end visibility across the product lifecycle:

Their suite of solutions cuts across physical and digital touchpoints to create seamless customer journeys, from design to after-sales.

Aerospace Industry:

As the world recalibrates its relationship with air travel, the aerospace industry is under pressure to develop innovative, high-precision products and experiences that reduce carbon emissions, increase productivity and improve passenger experiences.

Their aerospace offerings cover engineering, manufacturing and customer services. They work with a mature global engineering engagement model to deliver fast and optimized solutions for aerospace engineering analysis and modelling, continuous engineering support, cabin interiors design and development, passenger-to-freighter conversion, tooling as well as maintenance, repair and overhaul (MRO).

They leverage advanced technologies for predictive maintenance, tool design, data analytics, factory automation, process design and simulations, while their customer service solutions transform digital journeys into seamless customer experiences.

Aerospace Solutions provided by Tata Technologies:

Aerospace Engineering Solutions:

Their comprehensive engineering, design & development solutions for the airframe, cabin interiors, tooling, and plane-to-freighter conversion helps aerospace companies engineer better products at an optimal cost.

Aerospace MRO solutions

This suite of maintenance, repair, and overhaul products and solutions is designed to help Aerospace companies service their products faster and at an optimal cost for enhanced competitiveness in the marketplace.

Model-based Systems Engineering Solutions

Their Model-based Systems Engineering (MBSE) solution is designed to enable companies to bridge gaps between physical and digital product designs and bring in a new level of visibility, connectivity, and traceability across every aspect of the system lifecycle.

Education Industry:

As manufacturers seek to accelerate towards Industry 4.0, they need engineers who can engineer products of the future and deliver effective digital transformation. To equip the next generation of talent with the required skills, businesses need a partner that offers the relevant training, resources and support.

Tata Technologies have developed upskilling tools, training and courses that leverage their manufacturing domain knowledge and bridge the gap between industry and academia.

They work with colleges, universities and governments to equip the next generation of engineers and technicians with the skills that are required by the global manufacturing industry. They also offer a digital learning system through their proprietary iGET IT offering to corporations and individuals to address their training requirements.

Technical Alliances

Tata Technologies enter into various partnerships and alliances with their technology partners to augment their capabilities in providing solutions, technology and manpower to their clients.

Their third-party software vendor partnerships provide them with reselling opportunities. For example, through their partnership with Mobility in Harmony (MIH) they are co-developing various software and hardware platforms for EVs.

They partner with Logility for supply chain management solutions, where there is a mutual provision of consulting and solution implementation and integration with other enterprise systems.

Similarly, partners like Codincity and Kovair complement their capabilities with cloud and Application Lifecycle Management (ALM). Their long-standing relationship with third-party software vendor partners (such as Dassault Systemes and Siemens Industry Software Inc. among others) on PLM, MES and ERP allows them to select and implement full solutions (including systems integration) for their clients.

They are an important sales channel for their third-party software vendor partners, given their understanding of client requirements along with their offering of presale and post-sale support to the client. In addition, they enter into partnerships that also focus on PLM, MES and ERP, IOT, Industry 4.0 and data and digital customer experience.

About Tata Technologies IPO:

Tata Technologies has announced its plans to launch an initial public offering (IPO) in India. The company filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in January 2022**.** The IPO is expected to raise up to INR 1,200 crore ($160 million), with the company issuing fresh shares worth INR 600 crore ($80 million) and the remaining INR 600 crore ($80 million) coming from the sale of existing shares by the company’s promoters, Tata Motors and Tata Capital. The IPO will consist of a fresh issue of up to 4.76 crore equity shares and an offer for sale of up to 4.76 crore equity shares by Tata Motors and up to 2.38 crore equity shares by Tata Capital. The price band and other details of the IPO are yet to be announced by the company.

Tata Technologies plans to use the funds raised through the IPO for debt repayment and general corporate purposes. Additionally, the company plans to use the funds to invest in technology and digital capabilities to enhance its product development and engineering services.

The key objectives of the IPO by Tata Technologies are as follows:

Raising Funds for Growth Plans:

One of the main objectives of the IPO is to raise funds to support the company’s growth plans. The fresh issue of shares will provide the necessary capital for the company to invest in new technologies, expand its offerings, and make potential acquisitions. The company plans to use the funds to focus on strengthening its capabilities in areas such as artificial intelligence (AI), machine learning (ML), and digital twin.

Providing an Exit Opportunity for Tata Motors:

Tata Motors, the parent company of Tata Technologies, plans to reduce its stake in the company by up to 26% through the offer for sale. This will provide Tata Motors with an exit opportunity and allow it to divest its stake in Tata Technologies. The IPO is expected to fetch a better valuation for Tata Motors compared to a sale to private equity firms.

Enhancing Brand Value and Visibility:

Going public through an IPO can enhance the brand value and visibility of a company. It can help to establish the company as a credible player in the market and improve its reputation among stakeholders, including customers, employees, and investors. The IPO will provide Tata Technologies with an opportunity to showcase its expertise and capabilities in the engineering and product development digital services space.

Broadening the Investor Base: Going public can help a company to broaden its investor base and increase the liquidity of its shares. The IPO by Tata Technologies is expected to generate strong interest from institutional and retail investors, both in India and abroad. This will provide the company with a diverse set of investors and increase the visibility of its shares in the market.


Chief Executive Officer and Managing Director: Warren Kevin Harris

He holds a bachelor’s degree in engineering (technology) from the University of Wales Institute of Science and Technology, the University of Wales. He holds a doctorate in philosophy (honoris causa) from Amity University, Uttar Pradesh. He has completed the advanced management programme from Harvard Business School. He is a chartered mechanical engineer registered with and a member of the Institution of Mechanical Engineers.

He has been associated with the Company since October 1, 2005. He is currently a director of certain of the Subsidiaries, namely, Cambric Limited, Bahamas, INCAT International Plc., Tata Manufacturing Technologies (Shanghai) Co., Limited, Tata Technologies de Mexico S.A. de C.V. (under liquidation), Tata Technologies Europe Limited, Tata Technologies, Inc., Tata Technologies Nordics AB (previously known as Escenda Engineering AB), Tata Technologies Pte Ltd and Tata Technologies S.R.L.

Chairman: Ajoyendra Mukherjee

He holds a bachelor’s degree in engineering (electrical and electronics) from the Birla Institute of Technology and Science.

He was previously associated with Tata Consultancy Services Limited for almost four decades, where he held positions such as the head of business operations in Eastern India, Middle East and Africa, Switzerland, global head of CSR function, global head of energy and utilities practice and executive vice president and global head of human resources.


I have a very basic and novice query.
What exactly is the difference between Tata Elxsi and Tata Technologies? Is it very different? And does an existing shareholder of TATA Elxsi should apply for this IPO?


Tata Technologies and Tata Elxsi have some overlaps but they do have different business models. Tata Technologies is a product engineering and manufacturing solutions company, while Tata Elxsi is a product design and engineering services company.

Tata Technologies focuses on the entire product lifecycle, from concept to manufacturing. They provide services such as design, engineering, manufacturing, testing, and validation. Their customers include automotive, aerospace, and industrial companies.

Tata Elxsi focuses on the design and engineering of products. They provide services such as user experience (UX) design, industrial design, mechanical engineering, and embedded software development. Their customers include consumer electronics, telecom, and healthcare companies.

Here is a table that summarizes the key differences between Tata Technologies and Tata Elxsi:

Feature Tata Technologies Tata Elxsi
Business model Product engineering and manufacturing solutions Product design and engineering services
Target industries Automotive, aerospace, industrial Consumer electronics, telecom, healthcare
Services offered Design, engineering, manufacturing, testing, and validation UX design, industrial design, mechanical engineering, and embedded software development
Key customers Tata Motors, Airbus, GE JLR, Samsung, Ericsson, Philips

Pardon for redundancies when compared to Dada’s note at the start of this thread:

IPO-OFS, 9.57+ Cr. shares | Main Promoter, Tata Motors Ltd offering 8.1 cr. shares for sale | Total Equity Shares - 40.57 Cr. with FV INR 2 | I think that the Promoter’s shareholding % will reduce to 56.7% from 76.4% after IPO.

Primary Business:

Engineering, research, and development (“ER&D”) services - product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their Tier 1 suppliers. ER&D services is defined as the set of services offered to enterprises on activities which involve the process of designing and developing a device, equipment, assembly, platform, or application such that it may be produced as a product for sale through software development or a manufacturing process. The ER&D services are broadly broken down into software, embedded, and mechanical engineering services as shown below:

  • Manufacturing-led verticals (automotive, industrial, aerospace, defense, etc.): Account for more than half of the global ER&D spending. In terms of the expenditure, the automotive sector is the largest manufacturing ER&D vertical, and the second largest ER&D vertical overall, accounting for approximately 10% of global ER&D spend for 2021. [Tata Technologies’ focus area, just my understanding].

  • Hi Tech-led verticals (Software & Internet, Semiconductor, Telecom, etc.): Hi Tech-led verticals currently account for 38% of the global ER&D spend. Software and internet is the largest ER&D vertical, accounting for approximately 19% of global ER&D spend and is among the fastest growing verticals. [Tata Elxi’s focus area, just my understanding]

  • Services-led verticals (BFSI, Healthcare Payers & Providers, Media & Entertainment, etc.): Services-led verticals account for 11% of global ER&D spend, primarily driven by digital engineering investments. Though they currently make up the smallest portion of the ER&D spend pie, they are the fastest growing category. [TCS focus area is all the verticals for End-to-End solutions on IT front, in my opinion]

Opportunity Size:

  • From Tata Technologies perspective, the automotive outsourced ER&D market is pegged at $16-18 billion, the aerospace outsourced ER&D market currently stands at approximately $7 billion, and the Transportation & Construction Heavy Machinery (“TCHM”) service provider outsourced ER&D market is currently pegged at $2-3 billion.
  • From industry perspective, The ER&D spend outsourced to third party service providers reached $85-$90 billion in 2021 and is anticipated to grow at a 10-12% CAGR between 2021 and 2025.

Lines of Business:

1. Services offerings:

  • Providing outsourced engineering services for manufacturing clients and leveraging digital technology to optimize the way in which a manufacturing company conceives, develops, manufactures, and services new products. We service our clients using our global sales network comprising 18 global delivery centers in North America, Europe and Asia Pacific, leveraging our balanced on-shore/offshore global delivery model. From shared services to components, subsystems, and systems, to full vehicle turnkey projects, we deliver complex engineering programs and expert domain services to our clients, leveraging a global resource pool throughout the product realization lifecycle. We also specialize in ‘digital thread’ which enables solutions across processes and enterprises. These enterprise solutions help OEMs address challenges of process effectiveness across their value chain from product development to customer experience and accelerate the digital transformation journey.
  • We provide engineering services to clients primarily in the automotive vertical, as well as aerospace, TCHM and our other adjacent verticals. Automotive is our largest industry vertical which contributed 65 %, 66 %, and 67% to our revenue from operations for Fiscal 2022, Fiscal 2021, Fiscal 2020. We are currently engaged with six out of the top 10 and 11 out of the top 20 automotive ER&D spenders (across OEMs and tier 1 suppliers) and four out of the 10 prominent new energy ER&D spenders.
  • We have capabilities in areas such as product engineering (new product development from concept to realization), value engineering (benchmarking, should costing and enabling design), manufacturing (lean and digital manufacturing, integrating digital thread with the manufacturing value chain), sales and after sales (omnichannel client experience and product lifecycle extension, effective maintenance, repair and operations). In addition, we offer multiple bespoke solutions such as pre-studies for concept vehicles, virtual simulation, body engineering, battery management systems, battery swap systems, ePowertrain, embedded infotainment, vertical integration of value chain, smart manufacturing, digital thread enablement, telematics and digital sales and marketing, data management systems (DMS) and service management. We also specialize in delivering turnkey full vehicle solutions, a competency developed over a period of 10 years, that has been facilitated by a global footprint that positions delivery centers close to our key and focused clients. With our turnkey full vehicle solutions, we primarily focus on the development of the digital product and the management of the test, validation and launch processes. While the building of protype parts/vehicles and physical testing is typically managed by the OEM, we also have such capabilities and have an established network of global partners to facilitate these requirements.Our full-service offerings are depicted below:

2. Technology Solutions offering:

  • Products business comprising of the reselling of specific software that manufacturing companies deploy to conceive, develop, build and service new products. The revenue from our Products business for Fiscal 2022, Fiscal 2021, and Fiscal ₹432 Cr., ₹424 Cr., and ₹486 Cr. respectively, representing 49 %, 91 %, and 96 % of our revenue attributable to the Technology Solutions segment.

  • Education business where we work with colleges, universities, private enterprises and State Governments to equip the next generation of engineers and technicians with relevant skills that are required by the global manufacturing industry. Our Education business focuses on addressing academia and corporate skilling requirements by leveraging our manufacturing domain knowledge and the iGetIT offering. iGetIT is based on the blended learning methodology that offers self-paced courses on more than 2,000 mechanical computer aided design (MCAD), PLM and niche skill sets.

  • The revenue from our Education business for Fiscal 2022, Fiscal 2021, and Fiscal was ₹446 Cr., ₹43 Cr., and ₹23 Cr. respectively, representing 51 %, 9 %, and 4 % of our revenue attributable to the technology solutions segment.

  • Assist our clients to identify and deploy technologies and solutions that are used to manufacture, service and realize better products, as well as train people who need to enable the development of these competitive products. Our long-standing relationship with third-party software vendor partners (such as Dassault Systemes and Siemens Industry Software Inc. among others) on PLM, MES and ERP allow us to select and implement full solutions (including systems integration) for our clients. We are an important sales channel for our third-party software vendor partners, given our understanding of client requirements along with our offering of presale and post-sale support to the client. In addition, we enter into partnerships that also focus on PLM, MES and ERP, IOT, Industry 4.0 and data and digital customer experience.

The table below sets forth our industry verticals and their percentage contribution to our revenue from operations for the periods indicated:

Pricing Model and Contractual Terms:

Our suite of offerings helps us to target clients across the value chain, from basic resourcing and technical documentation services to high-end turnkey and full vehicle program services and digital enterprise solutions, such as IoT and digital twin. We generate a large portion of our revenue from our Services business through which we offer a range of engagement models, from basic staffing services offered as a time-and-material based pricing to outcome-based deliverables engagement (offered as part of and falling in the category of our fixed-bid services) where pay-out is linked mainly to the outcomes delivered.

Proprietary Platforms and Intellectual Property:

  • Our service offerings are well supported by advanced proprietary platforms across the value chain, including the following:
  • Product Development: eVMP, a scalable and flexible electric vehicle accelerator platform for new energy vehicle companies or OEMs, providing rapid configurations as per client specifications to help enable reduced NPI cycle time and quicker launch timelines and PULSE, an agile program management tool with six modules for end-to-end ER&D process tracking.
  • Manufacturing: FactoryMagix is a manufacturing execution systems solution that enables real-time data visibility providing improvement in overall equipment effectiveness. AMP.IOT is an IOT platform for improving traceability and efficiency in manufacturing operations, enabling plant monitoring and setting up a command center.
  • Customer Experience: Power of 8 is a client lifecycle management platform in the automotive industry which helps to digitize the bulk of client engagements and has led to improved digital lead conversions. TRACE is an IoT-led connected vehicle platform for fleet management and telematics, deployed in thousands of vehicles while the REMO mobility platform helps in connectivity of enterprise systems on-the-go through preconfigured services, with over 200,000 satisfied users.

Global Delivery Model:

  • We service our clients using our global sales and delivery network comprising 18 global delivery centers in North America, Europe and Asia Pacific. At each of our global delivery centers we employ a majority of local nationals which allows us to maintain a responsive local presence near our clients. We have a local presence in all the key automotive ER&D markets globally with approximately 1,300 employees in Europe, approximately 330 employees in North America, approximately 300 employees in Asia Pacific, excluding India, and 9,000 employees in India, each as of December 31, 2022.
  • The table below sets forth our key client concentration, in terms of our revenue from sale of Services for the periods indicated.

Risk Factors:

  • A material portion of our revenues from top 5 clients - (JLR and Tata Motors together, the “Anchor Clients”) and VinFast, a Southeast Asian electric vehicle OEM and one of the Top 5 Clients, across multiple full vehicle turnkey models.
  • 80+% of the Services segment revenue from AUTOMOTIVE industry
  • High attrition rate, ~25% in FY22
  • Increasing % of fixed price contracts compared to time-and-material contracts –Ratio at 53%:47% in FY22 from 45%:56% in FY20
  • 70% revenue in foreign Currencies
  • Lumpiness in revenue: Due to completion of vehicle programs and delay in the start of new programs as evident in FY18.
  • Various other risks in example form:
    • For instance, the contract with one of our clients in the aerospace industry provides for our Company’s uncapped indemnity for breach of its obligations under the agreement.
    • For instance, after our operations in Mexico did not meet our desired growth expectations, we ceased operations in Mexico and begun the voluntary liquidation of our Mexican subsidiary, Tata Technologies de Mexico, S.A. de C.V., in March 2020.
    • For instance, there have been delays in the past in payment of dues and repatriation of funds by foreign subsidiaries under the terms of the Reserve Bank of India, Master Direction – Export of Goods and Services, 2016.
    • For instance, certain of our clients, which are nascent companies in the automotive segment and who rely on us for a large majority of their engineering services requirements, could subsequently build up their captive R&D capabilities and accordingly reduce their dependence on our services.
    • For instance, recent restrictions on the issuance of employment visas imposed by the United States mean that we are unable to obtain new visas for our employees to work in the United States as of the date of this Draft Red Herring Prospectus. If the immigration laws in such countries change and make it more difficult for us to obtain non-immigrant visas for our employees, our ability to compete for and provide services to our clients in such countries could be impaired.
    • For instance, we rely on a European OEM software manufacturer for certain software, products, and services with respect to our education and training services in India and the United States.


  • Key competitors in the ER&D service market include pure play Indian ER&D service providers such as L&T Technology Services, KPIT Technologies and Tata Elxsi, IT service providers such as Tata Consulting Services (“TCS”), Wipro and Tech Mahindra, global ER&D service providers such as Bertrandt, Magna Steyr and EDAG and in-house ER&D departments of the clients
  • Global footprint with balanced talent presence across offshore and onshore locations, deep domain knowledge, technological and process knowledge and capabilities, scale capacity, ability to undertake turnkey projects and our long-standing client relationships are our key differentiator to compete effectively.

CEO and MD: Warren Kevin Harris

Summary of Financial KPIs:

Source: Tata Motor’s AR [In the AR, data of Year 2018 is same as the data of Year 2017. I have adjusted the data to the best of my abilities]:

Contingent Liabilities:


Key Takeaways:

  • Education business under ‘Technology Solutions’ has scaled up fast in FY22. Will this continue to grow at such a high pace?
  • Business is asset light, and highly profitable. Also, it has a long runway and high customer stickiness.
  • Growth of Revenue and Profits has been exceptional in recent 2 Yrs although it was stagnant from 2014 till 2021. What is causing this trend is not clear? Hope it is not an attempt to command premium valuations for the IPO.
  • Wait for the offer price to decide on the further course of action.

@Surender: thank you for the analysis; any views on their capital allocation? Dividend policy and dividend payout?

Disc: Invested

IMO, a liberal DPO shall continue because:

  • All industry players generate a lot of operating cash and pay dividends.
  • Industry is neither Capex nor WC heavy.

DRHP talks about a Dividend policy, which is full of clauses. Per ARs:

FY23 FY22 FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14
Net Cash from Operations 401 -38 1113 267 369 270 198 235 299 364
Capex 66 63 15 54 53 55 57 91 61 49
Dividends with dividend tax 499 - - 176 176 132 67 182 387 152
Dividends as % of Net Cash from Operations 124% - - 66% 48% 49% 34% 77% 129% 42%
DPS 12.3 42 42 32 16 42 90 35
# of shares (Cr.) 40.6 40.6 4.2 4.2 4.2 4.2 4.2 4.3 4.3 4.3

All closest peer at one place to judge the relative valuation(when the offer price is announed):


Thanks. On a like for like basis post bonus and stock split, the dividend is 120 per share (post split 12+) compared to 40 rs the highest in 2015.

1 Like

The portion reserved for employees will constitute up to 0.5 per cent of the post-offer paid-up equity share capital, while that reserved for TML shareholders will constitute up to 10 per cent of the offer, the company said in an addendum filed with the market regulator on Tuesday. These shares will be available for allocation on a proportionate basis.

Please help me understand what this means particularly what is the “record date” or equivalent for Tata Motors shareholders to be eligible. Also, where can I read the actual “addendum filed with the market regulator on Tuesday”? Addendum can be read here: SEBI | Tata Technologies Limited - Addendum to the DRHP


Will shareholders of DVR be also eligible under this scheme.

@chembanoda Record date was on Nov 13th as per the notification below.


Considering upper band of the offer price @ INR 500, relative valuations seem MILD, when compared with the listed peers. FYR:

Disc: Will apply.


Flat topline for several years 2015-21, then suddenly shown big jump in last 2 years. Now it is coming with IPO right at the peak. An opportunity OR a Trap ?


Could you disclose the source of information? Thanks


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Tata Technologies cater to auto industry and due to the cyclical nature of auto industry will also behave like a cyclical. Tata Elxsi diversified to other areas to reduce this effect. Tata Technologies entering aerospace will also reduce cyclicality to some extent. Current auto uptrend benefited them recently.



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