Winning Bizness Desk
Mumbai. Tata Capital has received board approval for its much-anticipated Initial Public Offering (IPO) on February 25. This move marks a significant milestone for the financial services arm of the Tata Group, as it prepares to go public. The IPO will consist of the issuance of 230 million new shares, in addition to an Offer for Sale (OFS) by existing shareholders, providing an opportunity for investors to gain exposure to the company's financial strength and market presence.
The board has also decided to issue shares worth up to ₹1,504 crore to existing shareholders on a rights basis, further strengthening the company’s equity base. This will be the first IPO from a Tata Group company since the successful listing of Tata Technologies in 2023. According to media reports, Tata Capital aims to raise approximately ₹15,000 crore through this IPO, making it one of the largest public offerings in recent times by a financial institution.
Listing Expected by September
Tata Capital is required to go public due to a mandate from the Reserve Bank of India (RBI). The RBI has classified Tata Capital under its "Upper Layer" category of Non-Banking Financial Companies (NBFCs). Companies that fall within this classification must list themselves on the stock market within three years from the date of categorization. Consequently, Tata Capital has a deadline until September 2025 to complete its listing on the Indian stock exchanges.
The IPO is expected to enhance the company’s transparency, governance, and capital efficiency, allowing it to compete more effectively with other financial institutions in the market. Industry experts believe that the listing will strengthen Tata Capital's position as a leading NBFC while also aligning with Tata Group's broader vision of expanding its financial services business.
Tata Sons Holds 92.83% Stake in Tata Capital
Tata Capital is a prominent Non-Banking Financial Company (NBFC) and a wholly owned subsidiary of Tata Sons. The company provides a diverse range of financial services catering to individual and corporate customers. As of March 31, 2024, its Assets Under Management (AUM) stood at ₹1.58 lakh crore, reflecting its strong financial position and extensive lending portfolio. The company specializes in various financial products, including personal loans, home loans, vehicle loans, commercial vehicle loans, and business loans, addressing the varied needs of borrowers.
Tata Sons holds 92.83% stake in Tata Capital
In addition to traditional lending solutions, Tata Capital has expanded its offerings to include credit cards, digital loans, and other innovative financial products. This diversified portfolio enables the company to meet evolving customer demands while ensuring steady revenue growth. Tata Sons holds a significant 92.83% stake in Tata Capital, with the remaining ownership distributed among other Tata Group companies and trusts.
With a robust business model, strong market reputation, and the upcoming IPO, Tata Capital is well-positioned for future growth. The IPO will not only facilitate capital infusion but also bolster investor confidence, providing the company with the necessary resources to scale its operations and enhance its market presence in India's dynamic financial sector.
