Tata Capital eyes ₹1.38 trillion market capitalisation in largest NBFC IPO

Tata group company's ₹15,512 crore issue to also be biggest since June 2024

Tata Capital is set to launch India’s largest ever initial public offering (IPO) by a non-banking financial company (NBFC), valuing the Tata group firm at ₹1.38 trillion. This will make the company India’s fifth-most-valued NBFC after Bajaj Finance (₹6.12 trillion), Bajaj Finserv (₹3.2 trillion), Jio Financial Services (₹1.87 trillion), and IRFC (₹1.59 trillion).

 

With an issue size of up to ₹15,512 crore, the issue will rank as the fourth-largest IPO in the history of India’s equity markets. It will also be the biggest listing in the domestic market since Hyundai Motor India’s record ₹27,869 crore issue in June 2024.

 

The company has set a price band of ₹310 to ₹326 per share. At the upper end, this band is at a 5 per cent discount to the price at which the lender had conducted a rights issue in July. The IPO will open for anchor investors on October 3, and for the general public from October 6 to 8.  

 

The offering comprises a fresh issue of shares worth ₹6,846 crore, which will be used to augment the company’s capital base.

 

There will also be an offer for sale (OFS) of up to 265.82 million shares by existing shareholders, primarily Tata Sons (the promoter) and the International Finance Corporation (IFC). The total offering will result in an 11 per cent dilution of equity.

 

This IPO is a landmark for two reasons: it will be the largest public offering from the Tata group, and only the second from the conglomerate in nearly two decades, after Tata Technologies in November 2023.

 

Tata Capital, classified as an “upper layer” NBFC by the Reserve Bank of India (RBI), was mandated to list by September. The company will miss this deadline by a matter of weeks.

 

“We have always been in constant dialogue with the RBI. I do not think a 6-10-day delay makes much of a difference. We are almost there in terms of the deadline to list,” said Rajiv Sabharwal, managing director and chief executive officer of Tata Capital.

 

Saurabh Agrawal, chairman of the NBFC, said the merger with Tata Motors Finance on March 31 influenced the timeline, a fact the regulator is aware of. He, however, refused to comment on the timeline of Tata Sons IPO despite the RBI deadline looming.

 

Established in 2007, Tata Capital has grown to become the third-largest NBFC in India with a loan book of ₹2.33 trillion as of June. Its portfolio is diversified, with retail loans constituting 61.3 per cent, SMEs 26.2 per cent, and corporate loans 12.5 per cent.

 

The merger with Tata Motors Finance, a leading commercial vehicle financier with assets under management of ₹36,515 crore as of December 2024, has further strengthened its position. The company holds a ''AA' rating from all domestic agencies.