Tata Capital likely to get Sebi approval for nearly $2-billion IPO

Tata Capital may soon get Sebi clearance for a $2 bn IPO, aiming for a listing before the September 2025 deadline for upper-layer NBFCs under RBI rules

Tata Capital, a subsidiary of Tata Sons, is likely to soon get approval from the Securities and Exchange Board of India (Sebi) for its nearly $2 billion (around ₹17,200 crore) initial public offering (IPO), according to sources.

 

The market regulator has finalised the clearance, and an observation letter is expected within the next few weeks, the sources said. 

This approval would pave the way for Tata Capital’s listing ahead of the September deadline set by the Reserve Bank of India for ‘upper layer’ NBFCs.  Tata Capital filed its draft IPO papers through the confidential route in April, allowing it to keep key details undisclosed until Sebi’s nod.  Emailed queries to both Tata Capital and Sebi remained unanswered until the time of going to press. 

 

Sebi’s website shows that the last communication with the company or its investment bankers was on May 24. 

So far, only two companies — food delivery major Swiggy and value retailer Vishal Mega Mart — have gone public after filing offer documents under the confidential route. 

If approved swiftly, Tata Capital’s IPO could mark one of the fastest clearances for a mega offering. Following Sebi’s approval, the NBFC will be required to file an updated draft red herring prospectus, which has to be kept in the public domain for at least three weeks before the IPO launch. 

The IPO is expected to include a fresh issue and an offer for sale by existing shareholders, including Tata Sons. 

In the unlisted market, Tata Capital’s shares are trading at around ₹1,075 apiece, according to Unlisted Zone. 

This would be only the second public debut by a Tata Group company in nearly two decades, following Tata Technologies (2023) and Tata Consultancy Services (2004). 

In February, Tata Capital’s board approved plans for the IPO, along with a rights issue. 

HDB Financial, another upper-layer NBFC, also secured Sebi’s nod for its ₹12,500 crore public offer last week, signalling a busy primary market ahead.  

In FY25, Tata Capital’s impairment on financial instruments surged to ₹3,072 crore (from ₹748 crore in FY24), impacting profitability. Despite a 67 per cent jump in interest income (₹19,203 crore) and 64.5 per cent revenue growth (₹21,866 crore), its standalone profit rose only 4 per cent to ₹2,594 crore. 

Asset quality also weakened, with the gross non-performing asset (GNPA) ratio increasing to 2.33 per cent in FY25, from 1.71 per cent. 

The net NPA ratio increased to 0.98 per cent from 0.38 per cent.