Tata Technologies eye IPO next year

LONDON: Tata Technologies, the engineering design and technology arm of India's leading corporate house, is looking to tap the capital market through an initial public offer by the next year, a senior company official said here.

"We are looking to list Tata Technologies in Indian market through an IPO in 2008," David Myers, the Chief Financial Officer of UK-based INCAT Ltd, a Tata Technologies company, said here.

The funds would be used to repay some of the debt and for our future expansion programs, Myers told a group of visiting Indian journalists here.
   
"We have set a goal to increase our total revenue to 500 million dollars by 2010, from about 220 million dollars currently," he said.
    
Tata Technologies had acquired INCAT in October 2005. Prior to this, INCAT had listed on the London Stock Exchange's AIM market nearly a year ago in November 2004, but remain listed for just about a year.
    
INCAT was listed on AIM at a price of 128 pence per share, after raising a total of 13 million pounds in the IPO. However, in less than a year, its 53 million pound acquisition by Tatas valued it more than 200 pence a share.
    
INCAT was established in 1989 and in 1991 it was on the verge of bankruptcy when the company's employees chipped in and bought it from the then owners. Later in 2005, it was acquired by Tata Technologies, but the INCAT brand name was retained as it was already established in the UK and other European markets, Myers said.
    
INCAT brand was launched in India last year, Myers added.
  
The company's main business is to provide engineering and design services with a significant focus on the automotive and aerospace industries.
   
The company has a total workforce of 3,000 people across the world, including a majority of 2,300 staff in Pune, India.
   
He said the target to increase the revenue to 500 million dollar, would also require a significant growth in headcount which could be easily doubled by the year 2010, with a vast majority of new jobs being in India.
    
Besides, Pune which is its headquarter and main delivery centre, INCAT also has India delivery centres in Mumbai, Chennai and Bangalore, where it sees significant growth potential, Myers said.
    
INCAT has operations in about 12 countries, with US being its largest market. North America contributes close to 54 per cent of its total revenue. The company has a total of 210 employees in the UK.

When asked what could be the valuation of Tata Technologies and how much it was looking to raise from its probable IPO next year, Myers said these details would be worked out in due course.
   
"But our aim today is to list the company by the end of next year," he said.
   
While noting that there were huge growth opportunities available to tap, Myers said the worldwide engineering services outsourcing market has a potential of 750 billion dollar, out of which just 1.5 billion dollar was being outsourced to India currently.
   
"This (the India size) should increase at least 25 times in the next 10-15 years," he noted.