Tata Technologies is reportedly in talks with Morgan Stanley Investment Management, Blackrock and a few US hedge funds to invest in its forthcoming initial public offering (IPO) at a valuation of $2.5 billion.

According to a Reuters report, apart from Morgan Stanley and Blackrock, the company is in touch with US asset managers Ghisallo Capital, Oaktree Capital and Key Square Capital to invest in the IPO.

If successful, the investment from these overseas entities may come in its anchor book where shares are allotted to institutional investors before the issue opens to retail and other investors such as high net worth individuals.

Last month, Tata Motors had sold around 10 per cent stake in Tata Technologies Ltd, which is its subsidiary, to TPG Rise Climate for Rs 1,613.7 crore.

The transaction valued Tata Technologies at 16,300 crore.

TPG Rise Climate is the dedicated climate investing arm of TPG’s $18 billion global impact investing platform.

Tata Technologies is a global engineering services company offering product development and digital solutions to global original equipment manufacturers.

It has expertise in the automotive industry and leverages this to serve clients in adjacent industries such as aerospace, transportation and construction heavy machinery.

Zinnov, the global management consulting firm, has estimated the global engineering, research and development (ER&D) spend to be around $1.64 trillion as of 2021 and expects it to grow to $2.28-2.33 trillion by 2025.

The IPO from Tata Technologies will be the first from the Tata group in nearly 20 years. The issue comprises an offer for sale of up to 9.5 crore equity shares.