Tata AutoComp Systems plans to raise 7.50 billion rupees ($169.3 million) IPO in July

Tata AutoComp Systems (TACO) plans to raise 7.50 billion rupees ($169.3 million) IPO in July

Tata AutoComp Systems, the Tata group company that makes automobile parts, plans to raise 7.50 billion rupees ($169.3 million) by selling shares to the public for the first time in July to expand its operations and cut debt.

The initial share sale will be followed by the sale of the company's shares in the open market by Tata group companies including Tata Motors, Tata Sons, Tata Industries and Tata Capital to help the group raise 3.50 billion rupees ($79 million), said R.S. Thakur, the company's chief executive. The Tata group will own 60% of the company after the initial share sale.

Analysts said the current volatility in the stock markets may impact valuations. "The timing of the IPO is not good," said Umesh Karne, analyst at brokerage Brics Securities. "Shares of most auto and auto-parts firms have been trading at low prices."

The automobile-parts maker has appointed JM Financial Consultants, Tata Capital Markets and JP Morgan India as advisers to the sale.

"Once we get listed, the scrutiny by the investor community will spur the performance of the company," Mr. Thakur said.

Tata AutoComp plans to double its revenue by 2015 and set up research and development centers in India in collaboration with its joint-venture partners.

Tata AutoComp's consolidated revenue in fiscal 2011 was 29 billion rupees ($654.6 million). The company has 47 manufacturing units across the country and has joint ventures with 12 global component makers.

Supplies of auto parts to Tata Motors Ltd accounts for almost half of the company's revenue. Its other clients include Ashok Leyland Motors, BMW India, Fiat India Automobiles, Toyota Kirloskar and Force Motors.

src-wsj