The affiliate of one of the leading private equity firms in the world, Warburg Pincus, is set to invest $360 million in Tata Technologies. The equity conglomerate would acquire approximately 30 percent stake in Tata Motors Limited and its subsidiary, Sheba Properties limited along with the entire 13 percent stake currently held by Tata Capital. The Tata Capital stake is split by two firms, Alpha TC Holdings Pte Ltd and Tata Capital Growth Fund I.
At the announcement, C Ramakrishnan, Group CFO, Tata Motors said, “Tata Technologies has developed significant engineering capabilities over the years. The partial divestment is part of Tata Motors’ plan to strategically monetize part of the value created while also inducting a valuable partner, together with whom the Company can excel in its next phase of growth. We look forward to partnering with Warburg Pincus and achieving greater heights for the Company and all its stakeholders.” Tata Technologies is a global engineering services and product development IT company that develops various products and by enabling the blue-chip automotive, aerospace and industrial machinery so that manufacturers can get better products in their respective expertise.
CitiGroup Global Markets India Private Limited acted as the sole financial advisor to Tata Motor while Tata Capital Investment Banking is the sole financial advisor to Tata Capital. The realisation of the acquisition will happen only after the regulatory approvals are done. “Tata Technologies is widely acknowledged for its superior service offerings and its industry-leading engineering capabilities. The Company has demonstrated the ability to scale accounts in a competitive industry by becoming embedded in the manufacturing and product development process of its customers. We are delighted to be partnering with the Tata Group to support the continued growth and development of the Company. We look forward to backing the strong management team at Tata Technologies and leveraging Warburg Pincus’ global network and prior experience in the engineering services space to help grow the business, organically and inorganically, and create value for all stakeholders”, said Vishal Mahadevia, Managing Director and Co-Head of Warburg Pincus India.