Tata Capital has approved an initial public offering (IPO) that will include a fresh issue of 23 crore equity shares along with an offer-for-sale by existing shareholders. Additionally, the company plans to raise ₹1,504 crore through a rights issue for its current shareholders.
This IPO will be the first by a Tata Group company after Tata Technologies’ successful listing in 2023. Earlier reports had suggested that Tata Capital was working on a ₹15,000 crore IPO, with advisory support from Cyril Amarchand Mangaldas and Kotak Mahindra Capital.
RBI Listing Requirement
The move aligns with the Reserve Bank of India directive that the so-called “upper tier” non-banking financial companies (NBFCs) get listed by September 2025. Among the companies required to comply with the directive includes the company that has been acquired and consolidated with Tata Capital in the month of January 2024, namely Tata Capital Financial Services.
Following a similar initiative, Bajaj Housing Finance, also in the top position of the RBI list, had a dramatic issue debut in September 2023 with a 135% premium against the issue price.
Financial Strength and Market Reaction
As per a Crisil Ratings report, the Assets Under Management of the company at the date of March 31, 2024 totaled ₹1,58,479 crore. The remaining shares and a 92.83% holding of the latter rest with the remaining companies and the trusts of the Tata Sons and the Tata Group.
Tata Sons has infused an additional ₹6,097 crore into Tata Capital in the last five years, indicating that it intends to build the lending business further. After announcing the IPO, shares of Tata Investment rallied 8% higher at ₹6,218 apiece.
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Source: Moneycontrol
News Desk
