Tata Group is preparing for one of its largest IPOs yet, with Tata Capital set to enter the stock market.
The company has appointed 10 major investment banks for this huge initial public offering (IPO), which is expected to raise around ₹15,000 crore.
This move is one of the most significant financial strategies for Tata Group in recent years.
The Investment Banks Involved
Tata Capital has selected the following investment banks for this IPO:
Kotak Mahindra Capital
Citigroup
JP Morgan
Axis Capital
ICICI Securities
HSBC Securities
IIFL Capital
BNP Paribas
SBI Capital
HDFC Bank
These banks will help guide Tata Capital through the IPO process, ensuring the company successfully enters the market.
The IPO will include both a fresh issue of shares and an Offer-for-Sale (OFS), through which Tata Sons and the International Finance Corporation (IFC) will reduce their stakes in the company.
IPO Filing and Confidentiality
Sources indicate that Tata Capital may submit its IPO application confidentially to the Securities and Exchange Board of India (SEBI) by late March or early April.
This confidential filing option, introduced by SEBI in November 2022, allows companies to keep sensitive financial information private until a final decision is made.
If market conditions aren’t favorable, companies can also withdraw the IPO without disclosing any details.
Tata Capital will be the eighth company in India to use this confidential filing process.
Tata Capital’s IPO Details
The IPO will consist of:
A fresh issue of 23 crore shares
An Offer-for-Sale (OFS) by existing shareholders
Ahead of the IPO, Tata Capital will also undertake a rights issue of ₹1,504 crore, fully subscribed by Tata Sons.
As of March 2024, Tata Sons holds a 92.83% stake in Tata Capital, while other Tata Group companies and IFC own the remaining shares.
Despite this IPO, Tata Sons’ stake in Tata Capital is not expected to fall below 75% even after the company is listed.
Regulatory Reasons Behind the Listing
Tata Capital’s listing is driven by regulations from the Reserve Bank of India (RBI). The RBI requires Non-Banking Financial Companies (NBFCs) in the upper layer category to list on the stock exchange within three years.
In January 2024, Tata Capital Financial Services merged with Tata Capital, bringing the company into the upper layer list. According to RBI rules, Tata Capital has until September 2025 to complete its listing.
Tata Capital’s Financial Growth
As of March 2024, Tata Capital’s Assets Under Management (AUM) stood at ₹1,58,479 crore, marking a significant rise from ₹1,19,950 crore in March 2023 and ₹94,349 crore in March 2022.
Over the last five years, Tata Sons has invested ₹6,097 crore in Tata Capital, supporting its growth.
The Tata Capital IPO will undoubtedly be one of the most anticipated stock market events, offering a substantial opportunity for investors and marking another significant milestone in the expansion of Tata Group’s financial services.
