Tata Capital is labeled with a $16-billion valuation prior to their IPO, with the International Finance Corporation (IFC) poised for substantial gains
Tata Capital, one of India's largest diversified Non-Banking Financial Companies (NBFCs), has taken a significant step towards growth and compliance by filing a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO).
The IPO aims to raise capital through a fresh issue of 21 crore shares and an Offer For Sale (OFS) of 26.58 crore shares by existing shareholders, totaling 47.58 crore shares. Tata Sons plans to sell 23 crore shares, and the International Finance Corporation (IFC) will sell about 3.58 crore shares [1][2][3][4].
The IPO is driven by Tata Capital’s need to strengthen its Tier-I capital base to support future lending operations and to comply with the Reserve Bank of India's (RBI) regulation that classifies Tata Capital as an “upper layer” NBFC, which mandates listing on stock exchanges by September 2025. This listing will enhance transparency and meet RBI’s regulatory norms for large NBFCs [2][3][4].
Tata Capital reported a net profit of around ₹3,665 crore for the fiscal year ending March 2025, up 16% from the previous year. The company's loan book size is approximately ₹2.26 lakh crore, ranking it third in the sector [2][4]. About 62% of its loan book comprises loans to individuals, highlighting its broad retail lending presence [2][4].
The IPO will be managed by a consortium of investment banks including Kotak Mahindra Capital, BNP Paribas, and Citigroup Global Markets. MUFG Intime India Pvt. Ltd has been appointed as the registrar of the issue [1][3].
Tata Capital's IPO is reportedly valued at around $16 billion, reflecting its strong position in the NBFC sector, extensive loan book, and growth potential. This valuation places the IPO among the most significant financial services listings in India in recent times [2]. However, detailed valuation methodology or price band finalization is pending, with price bands and dates yet to be announced officially [2].
In addition to its lending business, Tata Capital houses two private equity fund platforms: Tata Capital Growth and Tata Capital Healthcare.
For those interested in staying updated on Tata Capital's journey, the website offers a Pro subscription that grants privileged access to curated articles, providing an exclusive content experience [5][6]. Already being a Pro member allows users to log in to the website and access these articles [7]. The website also offers a login option for its Pro members [7].
This strategic move by Tata Capital is expected to yield significant financial gains, making it a noteworthy event on Dalal Street [4].
References:
- Tata Capital files draft papers for IPO
- Tata Capital IPO: All you need to know
- Tata Capital IPO: Details, date, price band, and other details
- Tata Capital IPO: What's in store for investors
- Subscribing to the PRO version of the website grants access to exclusive, curated articles
- The website's PRO subscription grants privileged access to curated articles
- The website offers a login option for its Pro members
The IPO of Tata Capital, a major player in India's NBFC sector, aims to raise capital for strengthening its Tier-I capital base, supporting future lending operations, and complying with RBI's regulations. The IPO, valued at approximately $16 billion, will help the company meet RBI’s regulatory norms for large NBFCs, enhancing transparency. Additionally, Tata Capital manages two private equity fund platforms – Tata Capital Growth and Tata Capital Healthcare – as part of their diverse business activities.
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