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Tata Capital has updated its draft papers for an upcoming IPO that could raise up to USD 2 billion, valuing the non-banking financial company at around USD 11 billion. The offering comprises a fresh issue of 21 crore equity shares and an Offer For Sale (OFS) of 26.58 crore shares. Tata Sons and International Finance Corporation will be selling 23 crore and 3.58 crore shares respectively under the OFS. The IPO proceeds will be used to strengthen the company's Tier-1 capital base and support future lending requirements.
Tata Capital, the non-banking financial arm of the Tata Group, has filed updated draft papers with the Securities and Exchange Board of India (SEBI) for its much-anticipated Initial Public Offering (IPO). The revised Draft Red Herring Prospectus (DRHP) outlines a public issue of up to 47.58 crore equity shares. Advertisement
The IPO is structured as a mix of a fresh issue of 21 crore shares and an Offer For Sale (OFS) of 26.58 crore shares. Of the OFS portion, Tata Sons plans to divest 23 crore shares, while the International Finance Corporation (IFC) will offload 3.58 crore shares. Market sources have indicated that the total issue size could be around USD 2 billion, potentially valuing the company at approximately USD 11 billion.
The capital raised through the fresh issue will be used to boost Tata Capital's Tier-1 capital base, enabling the firm to meet future business requirements, including expanding its lending portfolio. This capital augmentation comes at a time when the company is aligning itself with regulatory expectations and preparing for further growth.
The IPO forms a part of Tata Capital's broader compliance strategy with the Reserve Bank of India's guidelines. In September 2022, the RBI classified Tata Capital as an upper-layer NBFC-a designation that mandates listing on the stock exchanges within three years. The IPO will ensure that the company meets this regulatory deadline.
This offering, if executed as planned, will mark the largest public market debut in India's financial sector to date. It will also be the Tata Group's second major listing in recent years, following the successful debut of Tata Technologies in late 2023.
Tata Capital's financial performance has shown strong momentum. For the current financial year, the company reported a profit after tax (PAT) of INR 3,655 crore, up from INR 3,327 crore in the previous year. Its revenue surged to INR 28,313 crore from INR 18,175 crore, indicating significant growth in operations.
A broad syndicate of book-running lead managers is handling the IPO process. The list includes major domestic and international players such as Axis Capital, Kotak Mahindra Capital Company, BNP Paribas, HDFC Bank, HSBC Securities and Capital Markets, Citigroup Global Markets India, ICICI Securities, IIFL Capital Services, SBI Capital Markets, and JP Morgan India.
Tata Capital had originally filed its draft papers confidentially in April through the pre-filing route, and SEBI granted its approval in July. The updated DRHP was filed as a follow-up step required before moving to the final stage of submitting the Red Herring Prospectus (RHP).
Source PTI
5th Jun, 2025
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