Warburg Pincus planning to acquire stakes worth Rs 2,300 crore in Tata Tech

Private equity firm Warburg Pincus is looking forward to acquiring a significant minority stake in Tata Technologies for Rs 2,300 crore, ending months of negotiations.

According to multiple people aware of the development, for over a year, the company has been looking to divest 26-40% for a Rs 5,400 crore ($800 million) valuation.

Tata Technologies is an engineering design services company that started out as a subsidiary division of Tata Motors before becoming a standalone company. Currently, Tata Motors owns 70% of the company. Apart from that, several other Tata group entities and senior executives own 17% and the rest is held by outside financial investors.

About 55% of its turnover and an even greater number of its profits still come from Tata group companies like JLR and Tata Motors. The company is headquartered in Singapore and started as a design company in 1994 for Tata Motors' automotive business. Currently, it earns one third of its revenue from North America, Europe and Asia Pacific. Nearly 65% of its business comes from the automotive sector, 12% from aerospace and the rest from industrial machinery and other businesses.

"As stated before, from time to time, we review the performance of our non-core assets and companies and see how we can monetize them. We do not have any additional comment to offer at this point of time,” a Tata Motors spokesperson told ET:

A formal announcement is expected within a month, said officials mentioned above.

"They are the only investors with whom the Tatas are currently engaged with. It will be interesting to see if Tatas give a revenue commitment., " an official in the know, told ET.

Warburg among the easiest PE investors in India had last February successful exited their investment on QueEST another engineering design services