Tata Capital to mop up $500 mn for PE venture

Focuses on expansion of i-banking, corporate and retail finance.

Tata Capital, a non-banking financial company (NBFC), plans to raise up to $500 million from domestic and international investors for the first corpus of its private equity (PE) venture.

The 16-month-old NBFC arm of the Tata Group is simultaneously expanding in various businesses such as investment banking, retail banking, corporate finance and retail loans, besides private equity.

“Market conditions are tough and there are mid-tier companies that need funding for their expansion plans,” said Praveen P Kadle, Managing Director and Chief Executive Officer, Tata Capital. “We would also look at some sector-specific funds following the success of our first fund,” he added.

Tata Capital is also leveraging its tie-up with Japan’s Mizuho Securities in raising the fund for its PE business. The NBFC and Mizuho Securities came together early this year to offer services such as investment banking, broking, PE and wealth management.

“Initially, we are looking at companies that have linkages with the Tata Group. Gradually, we will look for opportunities beyond the Tata eco system,” he said.

So far, the NBFC used to focus on corporate and retail finance and has developed a book size of Rs 7,000 crore. The company is now focusing on the expansion of its other businesses.

Four months ago, it had appointed Shailendra Bhandari, former Managing Director of Centurion Bank of Punjab, to head its PE venture.

Tata Capital is registered with the Reserve Bank of India (RBI) as a non-deposit taking NBFC. So far, it has been using its own capital and raising fresh funds through other financial instruments such as private placement of debentures.

At the beginning of the current financial year, the company had a base of Rs 2,100 crore as its own capital and the rest it raised.

Now, the company is considering the external commercial borrowing (ECB) route to raise capital and is also planning to sell debt worth Rs 1,000 crore to meet fund requirements to execute its expansion plans.

The company On Wednesday launched its new brand identity with a consumer-centric punch-line, “We only do what is right for you”. It also launched its signature tune.