Tata Sons' 93% stake in Tata Capital valued at nearly ₹98,000 crore

Tata Sons’ 93 per cent holding in Tata Capital is valued at ₹98,178 crore ($11.4 billion), according to the group’s FY25 annual report, offering the first public valuation insight into one of India’s largest non-banking lenders. 

The figure is based on Tata Capital’s rights issue in March, which was priced at ₹281 per share, including a premium of ₹271, implying a total equity valuation of ₹1.05 trillion. That places the lender among the 10 most valuable non-banking financial companies (NBFCs) in India. 

Tata Sons, the holding company of the $150 billion Tata group, is preparing to sell up to 18 per cent of its stake in Tata Capital via an initial public offering (IPO), people familiar with the matter said. The IPO filing, submitted confidentially to regulators, has received approval from the Securities and Exchange Board of India, they said. A successful listing could unlock ₹17,672 crore for Tata Sons. 

Tata Capital is designated as an “upper layer” NBFC by the Reserve Bank of India (RBI), a classification that requires the company to go public by September. Other shareholders include employees and the International Finance Corporation (IFC).   

The IPO may help bolster liquidity for Tata Sons, which is seeing a rare decline in cash inflows. 

Total dividend and buyback income from listed group companies is expected to have declined 3.5 per cent year-on-year to ₹36,514 crore in FY25, from ₹37,832 crore the previous year -- the first annual decline since FY16. 

In FY24, Tata Sons posted standalone operating income of ₹43,767 crore, up 25 per cent from the year earlier. Nearly 95 per cent of that came from Tata Consultancy Services (TCS) in the form of dividends and buybacks. For FY25, those flows were projected to fall to ₹32,722 crore, down from ₹34,053 crore. 

Tata Sons — now debt-free and, along with Tata Capital, classified as an upper-layer NBFC — has applied to the RBI for reclassification to exit the framework, according to people familiar with the matter. The application remains pending. 

Ahead of the expected IPO, Tata Capital approved a second rights issue of ₹1,752 crore in June. Tata Sons is expected to contribute ₹1,630 crore in that round. 

Proceeds from the IPO are expected to help Tata Sons fund expansion in emerging sectors, including semiconductor manufacturing and electronics.