Tata Capital's IPO likely to hit market in the first half of October

Tata Capital is set to launch its IPO in October to raise Rs 16,500-17,500 crore, providing growth capital for 2-3 years as Tata group stake declines to 86.5% post issue

Tata Capital’s initial public offering (IPO) — one of the most anticipated of the year —— is expected to hit the market in the first half of October, slightly later than the regulatory deadline of September. The delay was due to the merger approval of Tata Motors Finance from the National Company Law Tribunal in May. The non-banking finance company (NBFC) approached the regulator for an extension of the deadline, which it received, sources privy to the development said.

 

Tata Motors Finance was a leading commercial vehicle financier in India. Its assets under management (AUM) stood at Rs 36,515 crore as on December 31, 2024.

 

 

Tata Capital — classified as an upper-layer NBFC under the Reserve Bank of India’s scale-based regulation — recently concluded roadshows that drew healthy investor interest across the globe.

 

Market estimates suggest Tata Capital will raise Rs 16,500 crore to Rs 17,500 crore — the biggest in the financial sector — through the offering. Proceeds are expected to be sufficient to support growth for the next two to three years, sources said. For further capital requirements, the company may tap qualified institutional investors. Following the merger of Tata Motors Finance, the company’s credit cost rose to 1.4 per cent, from 0.9 per cent pre-merger.

 

Tata Capital — the third-largest NBFC in the country — had an AUM of close to Rs 2.2 trillion as on March 31, 2025, growing by over 28 per cent on average in the last three years. It has a diversified loan portfolio across retail, small and medium enterprises, and corporate segments.

 

The NBFC operates its mortgage business through subsidiary Tata Capital Housing Finance, which had a loan portfolio of Rs 66,402 crore as on March 31, 2025, compared with Rs 52,042 crore a year earlier. Of this, housing loans constituted 58 per cent of the portfolio, followed by loan against property at 27 per cent and builder loans at 15 per cent.

 

The Tata group, which currently holds 95.6 per cent stake in Tata Capital (Tata Sons directly owns 92.83 per cent), will see its holding decline to 86.5 per cent post-IPO. International Finance Corporation (IFC), which owns 1.7 per cent, will sell half its stake.

 

A total of 47.58 crore shares will be sold in the IPO, comprising a fresh issue of 21 crore shares and an offer for sale of 26.58 crore shares by existing shareholders. Tata Sons will sell 23 crore shares, while IFC will sell 3.58 crore shares.