Explain Tata Technologies IPO allotment in 500 words
Tata Technologies Limited, a global engineering services company, recently launched its initial public offering (IPO) to raise funds for its expansion plans and debt repayment. The IPO received a positive response from investors, and the allotment process was carried out smoothly.
In an IPO, a company offers its shares to the public for the first time, allowing investors to become shareholders and participate in the company's growth. The allotment process is the final step in an IPO, where the shares are allocated to the investors who have applied for them.
Tata Technologies IPO allotment was conducted through a computerized system known as the "book-building" process. In this process, investors submit their bids for the shares at a specific price range determined by the company. The bids are then collected and analyzed by the book-running lead managers, who determine the price at which the shares will be allotted.
The allotment process begins with the company deciding the number of shares to be issued and the price range. In the case of Tata Technologies, the company aimed to raise around Rs 1,283 crore through the IPO. The price range for the shares was set at Rs 853 to Rs 860 per share.
Investors who wished to participate in the IPO had to submit their bids within the specified time frame. The bids could be either at the upper end or the lower end of the price range or at any price within the range. The investors also had the option to bid for a specific number of shares or for a specific amount of money.
Once the bidding period was over, the book-running lead managers analyzed the bids to determine the demand for the shares. They considered factors such as the price at which the bids were made, the number of shares bid for, and the overall demand from different categories of investors.
Based on this analysis, the lead managers determined the final price at which the shares would be allotted. In the case of Tata Technologies, the final price was fixed at Rs 860 per share.
After determining the final price, the lead managers allocated the shares to the investors. The allotment process followed a predefined formula, which took into account the total number of shares bid for and the number of shares available for allotment.
In the case of oversubscription, where the demand for shares exceeds the number of shares available, the allotment is done proportionately. For example, if an investor has bid for 100 shares and the oversubscription ratio is 2:1, the investor will be allotted 50 shares.
Once the allotment is done, the shares are credited to the investors' demat accounts. The investors can then trade the shares on the stock exchanges.
Overall, the Tata Technologies IPO allotment was carried out efficiently and transparently through the book-building process. The allotment process ensured fair distribution of shares among the investors based on their bids, allowing them to participate in the company's growth and benefit from its future performance.