Tata Capital IPO: Tata Group's NBFC inches closer to D-Street; details here

This would mark the second company from the Tata Group to go public in less than two years, as earlier in 2023, Tata Group's technology arm, Tata Technologies went public

Tata Capital IPO: Tata Group's financial services arm, Tata Capital, is all set to bring another investment opportunity to the Group for primary market investors as the company takes another step toward Dalal Street. Tata Capital, according to a Reuters report, is preparing to go public with the launch of its initial public offering (IPO). The Reuters report suggests that the company's board has approved plans for the public offering.

 

This would also mark the second company from the Tata Group to go public in less than two years. Earlier in 2023, Tata Group’s technology arm, Tata Technologies, went public, almost 20 years after Tata Consultancy Services, the Group's IT services arm, was listed on the exchanges in 2004. 

According to the reports, Tata Capital IPO will see the non-bank lender issue 230 million new shares, while current shareholders will divest their stake through the offer-for-sale (OFS) route.  

This development, according to Prashanth Tapse, senior VP and research analyst at Mehta Equities, is due to its merger in January 2024 Tata Capital Financial Services with Tata Capital which got into regulator observation, triggering mandatory requirement for 'upper layer' NBFCs to list within three years of being notified, that is on or before September 2025. 

 

Notably, Tata Sons directly owned 92.83 per cent of Tata Capital's equity shares, while most of the remaining stake was held by other Tata group companies and trusts as of March 31, 2024.

  Tapse believes that it would be too early to comment on the success of the Tata Capital IPO, as it would purely depend on market momentum, asking valuations, and peer comparison. "Considering the current market scenario, any public offer would likely receive neutral to decent demand and supply, with a high focus on liquidity and valuations," Tapse added.  

That said, Tata Capital's board has also approved a rights issue worth up to Rs 1,504 crore for existing shareholders. The NBFC has set the record date for the rights issue as Tuesday, February 25, 2025. Tata Capital, however, has not yet announced the issue price and the entitlement ratio for the rights issue.

 

Tata Capital (TCL), the flagship financial services company of the Tata Group, is a subsidiary of Tata Sons Private Limited, and operates as a non-banking financial company. Established in 2007, Tata Capital and its subsidiaries provide a wide range of services and products in the financial services sector and operate across various business areas, including Commercial Finance, Consumer Loans, Wealth Services, and the distribution and marketing of Tata Cards.