Tata Capital's valuation touches ₹1.38 trillion after rights issue

Shares priced at ₹343, a 22% premium over March

Tata Sons, the holding company of the Tata group, participated in its financial services arm Tata Capital’s rights issue last week at ₹343 per share — a 22 per cent premium to the earlier rights issue price of ₹281 per share in March.

 

This latest investment has raised initial public offering (IPO)-bound Tata Capital’s valuation by 31 per cent to ₹1.38 trillion, up from ₹1.05 trillion in March, according to company filings with stock exchanges. Last week, Tata Capital allotted additional equity shares of ₹10 each, aggregating ₹1,752 crore, on rights issue basis, the company said.

 

With the rights issue, the paid-up equity share capital of the company rose from ₹3,983.79 crore to ₹4,034.87 crore, the company said. After this, the valuation of Tata Sons, which holds 93 per cent stake, went up from ₹98,175 crore to ₹1.28 trillion.

 

Tata Capital is planning to come out with an IPO by September to raise up to $2 billion (₹17,259 crore). The IPO pricing for the company will be decided prior to the issue, depending upon the investors’ response and market conditions, say bankers.

 

Proceeds from Tata Capital’s listing are expected to bolster Tata Sons' war chest as it ramps up investments in emerging sectors such as semiconductor manufacturing, and electronics. 

 

In 2023-24 (FY24), Tata Sons’ standalone operating income rose 25 per cent to ₹43,767 crore, with nearly 95 per cent coming from TCS (Tata Consultancy Services) dividend, and buyback flows. For FY25, dividend receipts from TCS are expected to fall to ₹32,722 crore from ₹34,053 crore.

 

Meanwhile, Tata Sons — now debt-free and tagged as upper-layer non-banking financial company (NBFC) — has sought to exit the Reserve Bank of India’s (RBI’s) NBFC-UL framework and has filed for reclassification, people said. The application is pending with the RBI.

 

As of March 2025, Tata Capital reported a consolidated tangible net worth of ₹32,892 crore, up from ₹24,069 crore the previous year, supported by a ₹1,500 crore capital infusion from Tata Sons during FY25. Consolidated gearing improved slightly to 6.04x from 6.16x, Care Ratings said in May this year. As of September 2024, Tata Capital maintained a healthy capital structure, with a tangible net worth of ₹25,480 crore, and gearing of 6.35x. The company’s standalone capital adequacy ratio (CAR) stood at 16.91 per cent, well above the regulatory threshold, the rating firm said. It added that Tata Capital’s capital structure continues to benefit from the strong backing of the Tata group, which provides both financial flexibility, and a demonstrated track record of capital support. The rating firm said it expects Tata Capital’s gearing to remain within the 6.0x-6.5x range over the medium term.