Tata Capital Board Approves IPO to Raise Around ₹15,000 Crore

Tata Capital Financial Services, a subsidiary of the Tata Group, is preparing for an initial public offering (IPO) aimed at raising approximately ₹15,000 crore. The company's board has approved a fresh issue of around 230 million shares, which will be combined with an offer for sale (OFS) by its promoters. This move marks a significant step in Tata Capital’s journey, making it the first Tata Group company to go public after the blockbuster listing of Tata Technologies in 2023.

Rights Issue for Existing Shareholders

Alongside the IPO, Tata Capital’s board has also approved the issuance of shares worth up to ₹1,504 crore on a rights basis. This issuance will allow existing shareholders to maintain their equity stake while contributing to the company’s expansion plans.

Tata Capital’s IPO in Context: Recent Market Trends

The Indian financial sector has witnessed several high-profile listings in recent years. In September 2024, Bajaj Housing Finance successfully raised nearly ₹6,560 crore through its IPO. Similarly, Jio Financial Services (JFS) went public after its demerger from Reliance Industries in August 2023. Tata Capital’s IPO aligns with these industry trends, reflecting the strong investor interest in India's non-banking financial sector.

Tata Sons and Tata Capital’s Shareholding Structure

Tata Sons, the parent company, currently owns a 92.8% stake in Tata Capital. Additionally, as of December 31, 2024, Tata Sons holds a 68.51% stake in Tata Investment Corporation. Other key shareholders in Tata Capital include:

• Tata Group companies: 2.46%

• International Finance Corporation (IFC): 1.91%

• Employee Welfare Trust: 1.16%

• Other investors: 1.64%

Following the announcement of the IPO, shares of Tata Investment Corporation surged 7.29% to ₹6,169.20 on the Bombay Stock Exchange (BSE), indicating strong investor confidence in Tata Capital’s public listing.

Regulatory Approvals and Compliance for Public Listing

In February 2024, Tata Capital’s board approved amendments to its memorandum and articles of association, further streamlining its journey toward public listing. The Reserve Bank of India (RBI) classifies Tata Capital as a systemically important non-banking financial company (NBFC), meaning it must comply with stricter regulatory guidelines. One of these obligations includes listing on the stock exchange within a specified timeframe.

Role of Tata Capital in the Financial Ecosystem

Tata Capital serves as the primary financial services arm of the Tata Group, offering a diverse range of financial products to individuals, businesses, and institutions. Some of its key offerings include:

• Personal and Business Loans – Financing solutions for retail and corporate customers.

• Mortgages and Credit Services – Home loans, loans against property, and credit card services.

• Investment Banking – Advisory and capital market solutions for enterprises.

• Insurance Solutions – Life and general insurance policies tailored for different market segments.

The company’s diversified portfolio strengthens its market position and enhances its appeal to investors ahead of its IPO.

Offer for Sale (OFS) and Investment Banker Collaborations

In addition to issuing new shares, Tata Capital’s IPO will include an Offer for Sale (OFS), allowing existing stakeholders to partially divest their holdings. The company has been in discussions with leading investment bankers to structure the listing process efficiently. By incorporating an OFS component, Tata Capital aims to ensure strong investor participation while providing liquidity to its current shareholders.

Strategic Growth and Future Prospects

By going public, Tata Capital is set to unlock significant value and raise capital for future expansion. The funds generated from the IPO will likely be used for business expansion, technology investments, and compliance with regulatory capital requirements. Additionally, listing on the stock exchange will improve the company’s transparency, governance, and credibility in the financial markets.

Conclusion: A Landmark Move for Tata Capital

Tata Capital’s upcoming IPO is a crucial milestone in its growth trajectory. As one of India's most significant financial services companies, its entry into the stock market is expected to attract substantial investor interest. With strong backing from Tata Sons, a diversified portfolio of financial products, and regulatory compliance in place, Tata Capital is well-positioned for a successful public offering.