Tata Technologies IPO: How the Tata Group firm stacks against KPIT Technologies

Client dependency: Both firms are heavily dependent on the automotive sector, with Tata Technologies getting around 70% of its business from the sector. For KPIT Tech, it stands at 96%. A key strength of Tata Technologies is its strong clientele, including Tata Motors and its subsidiaries, such as JLR, which are leading players in their industries. However, the dependency of Tata Technologies on Tata Motors and its subsidiaries, which accounted for 55% of the company's FY23 revenue, is a risk too.

FY23 revenue: Tata Technologies' FY23 revenue was at ₹4,414 crore, while KPIT revenue was at ₹3,365 crore. From an investor point of view, Tata Technologies has had negative operating cash flow in the past, with the Tata Group firm reporting negative cash flow in FY22.

CC revenue growth: Tata Technologies' cc revenue growth was at 24% compared to KPIT Tech's 36.7%.

FY23 margins: Tata Technologies' margin for FY23 was 18.6% compared to KPITTechnologies' 18.8%.

FY23 PE (Price-to-Earnings): At an upper price brand valuation of ₹500, Tata Technologies' PE is estimated at 32 times compared to KPIT Technologies' 80.3X.

Tata Technologies IPO has a price band of ₹475-500 per share with a lot size of 30 equity shares and its multiples thereof. At this price range, analysts peg its post-issue market cap between ₹19,269 crore and ₹20,283 crore.

Meanwhile, Tata Tech's shares are trading at a premium of ₹350 in the grey market today, which is a 70% uptick over its issue price. The grey market is an unofficial platform wherein IPO shares can be bought and sold until the listing.