Tata Capital prepares for IPO listing, eyes $1.81bn raise

By Gloria Methri

Tata Capital, the financial services arm of the Tata Group, is preparing for an Initial Public Offering (IPO) projected to raise approximately $1.81 billion (Rs15,000 crore). 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 their classification, setting a deadline of September 2025 for Tata Capital. ​

IPO Structure and Financial Details

According to reports, the IPO will comprise a fresh issuance of about 230 million equity shares, supplemented by an Offer for Sale (OFS) from existing shareholders. Specifics regarding the OFS have yet to be disclosed and will depend on market conditions and regulatory approvals. ​

In preparation for the public offering, Tata Capital’s board has sanctioned a rights issue amounting to ₹1,504 crore, targeting existing shareholders to bolster the company’s capital base ahead of the IPO. ​ The funds raised are expected to support the company’s expansion plans and strengthen its position in the competitive financial services sector. ​

The announcement of the IPO has positively influenced market sentiment, with shares of Tata Investment Corporation, which holds a stake in Tata Capital, experiencing a notable surge. This reflects investor optimism regarding the forthcoming public offering and its potential impact on the Tata Group’s financial services portfolio. ​

Tata Capital’s advances towards its IPO signify a pivotal development for the Tata Group’s financial services division. This move is anticipated to unlock substantial value for stakeholders and position the company for sustained growth in the evolving financial landscape.