Tata Group quietly preparing for another IPO
Tata Group – The salt-to-steel conglomerate Tata Group, which has 29 publicly listed companies and a combined market capitalization of $314 billion (Rs 23.4 trillion) as of December 31, 2021, may be covertly preparing for a very different IPO amid all the rumours floating around about IPOs being planned for Tata Play and Tata Technologies. By 2025, India’s electronic industry is expected to be worth $300 billion, a market share that Tata Group hopes to capture through Tata Electronics Pvt Ltd. (TEPL). This 2020 incorporation specializes in producing precision electronic components, and it has a manufacturing site in Tamil Nadu’s Krishnagiri area.
Tata Electronics has gained attention recently as a result of Tata Sons Chairman Natarajan Chandrasekaran’s confirmation of the company’s plans to enter the semiconductor industry, which is expected to generate $1 trillion in revenue globally by 2030. The group intends to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility under Tata Electronics. This procedure, also known as assembly, testing, marking, and packaging (ATMP), is essential to the production of semiconductors because no chip may be utilized in a product without first being packaged and tested. The group also engaged Raja Manickam to be the CEO of Tata Electronics OSAT India for the same purpose.
However, the Tata Group might not consider OSAT, an easy-to-develop technology that accounts for about 75–80% of industry income. Instead, Advanced Packaging, which is engineering-led and involves processing similar to a wafer fab, is being considered by the corporation. The latter is growing more significant as key corporations with cutting-edge nodes include TSMC and Intel. Tata Electronics and even the other forthcoming OSATs will need to import processed wafers because India does not currently have any fabs.
Tata Electronics and the Tamil Nadu government signed a memorandum of understanding (MoU) in February 2021 to establish a factory for producing mobile components. In the new factory in Krishnagiri, the business planned to invest Rs 4,684 crore. N Chandrasekaran has previously stated that this was a very sizable undertaking in precision engineering and manufacturing and would give the nation capabilities. Additionally, Tata Group and Wistron are currently negotiating to form a joint venture for the production of electronics that will manufacture iPhones in India.
Piyush Nagda, Director Of Private Wealth, Monarch Networth Capital Ltd., told Business Today that Tata Electronics is a new business by the Tata Group that aims to manufacture precise components like semiconductors, EVs, and EV batteries based on the breakthroughs.
Although there is a sizable market for this specialised industry, Tata Electronics will need several years to set up its manufacturing facilities and gain business momentum. It will take them some time to become public.
Tata Electronics Private Limited may take 5-7 years to be IPO-ready, but there is no set order or sequence for making commercial decisions. And Tata Electronics is one unlisted Tata Group firm you might want to keep an eye on considering that it will partner with well-known brands.