RBI move to ease risk weights may free up Tata Capital's equity: Fitch

Fitch Ratings says RBI's proposal to ease risk weights on infra loans could free up capital for Tata Capital, while relaxed ECB norms may aid NBFC foreign funding

Global rating agency Fitch on Monday said the RBI’s proposal to lower risk-weights on financing operational infrastructure assets may help free up regulatory capital for Tata Capital Ltd (TCL).

 

Tata group entity, listed on stock exchange on Monday, has a portfolio of such loans which is less than 10 per cent of total loans. However, most rated non-bank financial companies are not significantly exposed to such lending, Fitch said in a statement.

 

TCL is designated as an “Upper Layer” NBFC and is subject to higher regulatory requirements, including a public listing. The public issuance should improve the company’s capital base.

 

 

Its standalone capital adequacy ratio (CAR) stood at 17 per cent with Tier I CAR stood at 12 per cent, as of March 2025.

 

TCL’s closing loan portfolio grew by 41 per cent per year-on-year (Y-o-Y) basis to ₹2,21,950 crore as on March 31, 2025, against ₹ 1,57,761 crore in March 31, 2024, according to annual report for financial year 2025 (FY25).

 

Meanwhile, Fitch, while referring to proposed revision in norms of External Borrowings, said the removal of the 450 basis points cap over the benchmark for pricing foreign borrowings could allow lower-rated NBFCs to increase foreign-currency funding, subject to market risk appetite.

 

Also, a proposal to allow NBFCs to raise over $750 million in foreign-currency funding annually, without prior regulatory approval, should ease the process for larger offshore debt-raising, the rating agency added.  

Strong debut likely for LG India today

  Shares of LG Electronics India are expected to list with strong gains during their trading debut on Tuesday, if the grey market activity is an indication. The grey market premium for the shares of the Indian unit of South Korean appliances shot up from 13 per cent at the start of the month to 37 per cent on Monday. 

  The spike follows a strong response to LG’s ₹11,607 crore initial public offering (IPO). The share sale evoked bids worth ₹4.4 trillion, most for a domestic IPO, achieving subscription of 54 times. The participation underscores confidence in LG’s brand equity, market leadership in consumer durables, and financial performance, said analysts.