Key Highlights:
The Tata Group, under the leadership of N Chandrasekaran, has officially filed confidential draft papers with SEBI for a massive ₹15,000+ crore IPO of its flagship financial services arm, Tata Capital, industry sources told Moneycontrol.
The listing, executed via the confidential pre-filing route, marks a strategic and regulatory-driven milestone for the group, making Tata Capital the eighth Indian firm to pursue this SEBI-approved method.
IPO Structure and Key Stakeholders
The IPO is expected to be a blend of fresh issue and offer for sale (OFS). Parent company Tata Sons and investor International Finance Corporation (IFC) will dilute their stakes, with the majority of the OFS expected to come from Tata Sons.
According to filings, Tata Capital’s board has approved:
- Fresh issue of up to 230 million equity shares
- Stake dilution by existing shareholders
- Recent rights issue of ₹1,504 crore, fully subscribed by Tata Sons
Strategic Advisors and Pre-Filing Mechanism
Tata Capital has reportedly engaged 10 top investment banks including:
- Kotak Mahindra Capital
- JP Morgan
- Citi
- Axis Capital
- ICICI Securities
- HSBC Securities
- BNP Paribas
- HDFC Bank
- SBI Capital
- IIFL Capital
Cyril Amarchand Mangaldas is advising on the legal front.
The confidential pre-filing route, introduced by SEBI in November 2022, allows companies to protect sensitive financial and business data before fully committing to the IPO process.
Why Now? Regulatory Pressure from RBI
The IPO move is closely tied to RBI’s directive requiring all “upper layer” NBFCs to list on stock exchanges within three years of notification. Tata Capital’s merger with Tata Capital Financial Services in January 2024 brought it within the purview of this mandate.
This aligns with actions by peers like:
- Bajaj Housing Finance – listed in Sept 2024 with 135% debut gain
- HDB Financial Services – filed for a ₹12,500 crore IPO
Tata Capital’s Market Position
Tata Capital is registered with the RBI as a systemically important, non-deposit-taking Core Investment Company (CIC). It operates across retail and wholesale finance, including personal loans, infrastructure finance, and SME lending.
According to CRISIL Ratings:
- AUM as of March 31, 2024: ₹1,58,479 crore
- Capital Infusion by Tata Sons over 5 years: ₹6,097 crore
Breakdown of Capital Infusion:
- FY2019: ₹2,500 crore
- FY2020: ₹1,000 crore
- FY2023: ₹594 crore
- FY2024: ₹2,003 crore
These figures reflect Tata Sons’ strong backing and growing focus on the lending business.
Outlook and Shareholding Post-IPO
As of March 31, 2024:
- Tata Sons holds 92.83% in Tata Capital
- Remaining stake held by Tata Group entities and IFC
A Fitch Ratings report indicated that Tata Sons is expected to retain at least 75% stake post-IPO, safeguarding majority control in the foreseeable future.
What’s Next?
Following regulatory approvals and market conditions, the IPO is likely to hit markets later in 2025. If successful, Tata Capital will be the latest in a growing line of financial entities aligning with RBI’s NBFC listing push while continuing Tata Group’s diversification strategy.
Written by Sneha Chakravarty
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