Tata Capital, the financial services arm of the Tata Group, has secured board approval for its Initial Public Offering (IPO), aiming to raise over Rs 15,000 crore. This move signifies the Tata Group’s first public listing since Tata Technologies’ debut in 2023. The IPO will comprise a fresh issue of up to 23 crore equity shares and an Offer-for-Sale (OFS) by existing shareholders, including Tata Sons and the International Finance Corporation (IFC).
In preparation for the IPO, Tata Capital has also sanctioned a rights issue worth Rs 1,504 crore for its existing shareholders. Tata Sons, holding a 92.83 per cent stake in Tata Capital, has subscribed to its entire entitlement, reinforcing its commitment to the company’s growth.
This strategic move aligns with the Reserve Bank of India’s (RBI) mandate requiring ‘upper layer’ non-banking financial companies (NBFCs) to list within three years of notification, with a deadline set for September 2025. Tata Capital, identified as an ‘upper layer’ NBFC, is complying with this directive.
As of 31st March, 2024, the company reported Assets Under Management (AUM) of Rs 1.58 lakh crore, reflecting significant growth from Rs 1.19 lakh crore in the previous year. The company’s revenue for FY24 stood at Rs 18,178 crore, marking a 34 per cent increase year-on-year, with net profits reaching Rs 3,150 crore.
The IPO is anticipated to be one of the largest in India’s financial sector, with market analysts estimating Tata Capital’s valuation at up to $11 billion. The company has filed preliminary papers with the Securities and Exchange Board of India (SEBI) under the confidential pre-filing route and is targeting a listing by September 2025.
Following the IPO announcement, shares of Tata Investment Corporation surged by 8 per cent, indicating positive investor sentiment towards the upcoming listing.
This development underscores Tata Capital’s commitment to expanding its financial services footprint and adhering to regulatory requirements, while providing investors with an opportunity to participate in the company’s growth trajectory.
