Tata Autocomp Solutions: September 2011

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September 2011

TATA AUTOCOMP SOLUTIONS

Prepared by: CA Shailesh Chandak; Pranav Gundlapalle, CFA

Auto Components - Riding in the top gear


Indian Auto Component industry has grown at at CAGR of 21% over last five years to current size of $26 billion Exports are only 13% of the demand Auto Components industry to witness a strong 14-16% CAGR over FY10- 15 Sales to automobile OEMs to grow at 15-17% CAGR driven by strong domestic demand Exports to grow at 20-22% CAGR over FY10-15
5 0 30 25 20

Turnover of Indian Auto Component industry

15
10

Turnover (in bln. $) Exports (in bln. $)

Key Drivers: Increased drive by global automakers to source locally. Domestic auto industry to grow rapidly with

improvements in infrastructure.
Improving Quality + Low cost of Skilled Manpower + Rapidly growing Design Capability = India emerging as preferred auto component sourcing hub

TATA AUTOCOMP SYSTEMS (TACO)

Leading player in auto component sector with 15% market share. A TATA group company with Mr Ratan Tata as its chairman. 270% increase in turnonver over last 5 years 15 Global partners, 30 plants, 3 Export Oriented Units and 6 Engineering Centers. Serve every OEM and market segment in India with customers in all segments Passenger Vehicles, Commercial Vehicle, Farm Tractor, Two and Three wheelers.

THE ISSUE
An IPO for up to INR 7500 million and an offer for sale aggregating up to 35.627 million equity shares. An 100% book building process To constitute at least 25% of post issue equity share capital IPO- For What? Capex relates to modernization at Maan, Pune and Bengaluru plant and set up of new facility at Pantnagar. Subsidiary investment involves expanding facilities at Pune, Jamshedpur and Pantnagar. Loan repayment includes ECBs, term loan and inter corporate deposits.
Utilization of Net Proceeds 3000 2500 2000 INR 1500 (Mn) 1000 500 0

2013 2012

2011

Why This Issue?


A pure play on the auto sector One of the most promising sectors with expected

industry CAGR of 15%


Attractive valuations with a PE < 18 The TATA brand TACO has one of the most diverse product portfolio Supplier to every OEM in the country Outstanding pedigree of the board of directors A few risk factors: Exposure to TATA motors forms 48% of revenue Dampening of local auto sector demand due to rising fuel prices, slowing economy etc. Macro economic factors -increasing interest rates, inflation of raw material costs

Tata Autocomp Systems


Close to 15% market share Completely owned by Tata group companies 270% increase in turnonver over last 5 years 15 Global partners, 30 plants, 3 Export Oriented Units, in India and 6 Engineering Centers Customers in all segments Passenger Vehicles, Commercial Vehicles, Farm Tractors, Two and Three Wheelers Offering services across the value chain - Manufacturing, Engineering and Supply Chain Management Serve every OEM and market segment in India

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