Tata Capital files for confidential IPO with Sebi, eyes ₹15,000 cr listing

Tata Group’s financial services division, Tata Capital, has filed a confidential pre-filing for its initial public offering (IPO) with the Securities and Exchange Board of India (Sebi). The action forms a component of the organization’s plan to launch its financial division publicly while protecting confidential business details, Moneycontrol reported on Friday referencing sources.

Tata Capital, a non-banking financial services company and a subsidiary of Tata Sons, has hired 10 investment banks to serve as advisors for the listing. The financial institutions comprise Kotak Mahindra Capital, Citi, JP Morgan, Axis Capital, ICICI Securities, HSBC Securities, IIFL Capital, BNP Paribas, SBI Capital, and HDFC Bank.

The report shows that the IPO will include both primary and secondary share offerings, as Tata Sons and investor International Finance Corporation (IFC) intend to lower their holdings. Nonetheless, Tata Sons is anticipated to take on a larger role in the sale of stakes.

On February 25, Tata Capital’s board sanctioned the IPO, which includes a new issuance of up to 230 million shares alongside a sale offer from current shareholders. The IPO depends on market conditions and the necessary regulatory approvals.

As of March 31, 2024, Tata Sons held a direct ownership of 92.83 percent in Tata Capital, with the remaining shares owned by other entities within the Tata Group and IFC. A recent report by Fitch Ratings indicates that the public listing is not likely to lower Tata Sons’ stake below 75 percent in the foreseeable future. Prior to the IPO, Tata Capital’s board also approved a ₹1,504 crore rights issue in February. Tata Sons is anticipated to take up the complete rights issue to assist the company’s financial requirements.

Tata Capital is a non-deposit-taking, systemically important Core Investment Company that is registered with the Reserve Bank of India (RBI). It functions in both wholesale and retail finance sectors, providing a diverse array of financial products.

As per Crisil Ratings, Tata Capital’s assets under management (AUM) were ₹158,479 crore on March 31, 2024, up from ₹119,950 crore in 2023 and ₹94,349 crore in 2022. Over the last five fiscal years, Tata Sons has invested ₹6,097 crore in Tata Capital, demonstrating its dedication to growing its financial services sector. This encompasses ₹2,500 crore in the financial year 2018-19 (FY19), ₹1,000 crore in FY20, ₹594 crore in FY23, and ₹2,003 crore in FY24.