Tata Capital, the financial services arm of the Tata Group, has taken a significant step toward its public listing by confidentially pre-filing documents for an Initial Public Offering (IPO) with the Securities and Exchange Board of India (SEBI), according to sources cited by Moneycontrol. The move aligns with the conglomerate’s strategy to bring its financial arm to the market while keeping sensitive business information protected.
Tata Capital’s proposed IPO will feature a mix of fresh equity shares and an offer for sale (OFS) by existing stakeholders, including parent company Tata Sons and global investor International Finance Corporation (IFC). Tata Sons is expected to play a dominant role in the stake dilution.
The company has engaged a consortium of 10 leading investment banks to advise on the IPO. These include Kotak Mahindra Capital, Citi, JP Morgan, Axis Capital, ICICI Securities, HSBC Securities, IIFL Capital, BNP Paribas, SBI Capital, and HDFC Bank.
In February, Tata Capital’s board approved the issuance of up to 230 million fresh equity shares as part of the IPO plan. The public offering is subject to market trends and regulatory clearances.
As of March 31, 2024, Tata Sons held a 92.83% stake in Tata Capital, with the rest owned by other Tata Group entities and IFC. A report by Fitch Ratings noted that Tata Sons is likely to maintain at least a 75% holding post-listing.
To support the company’s capital needs ahead of the IPO, Tata Capital also approved a Rs 1,504 crore rights issue in February, with Tata Sons expected to fully subscribe.
Tata Capital is registered with the Reserve Bank of India as a systemically important, non-deposit-taking Core Investment Company. It serves both retail and wholesale segments through a wide portfolio of financial services.
The company has demonstrated strong financial growth, with assets under management (AUM) reaching Rs 1.58 lakh crore as of March 31, 2024—up from Rs 1.19 lakh crore in 2023 and Rs 94,349 crore in 2022. Over the past five years, Tata Sons has infused Rs 6,097 crore into the firm, underlining its focus on scaling up the financial services business.
With this move, Tata Capital becomes the eighth Indian company to utilize SEBI’s confidential pre-filing route, joining names like Tata Play, Oyo, Swiggy, Vishal Mega Mart, Credila Financial Services, Indira IVF, and PhysicsWallah.
Introduced in November 2022, the pre-filing option allows companies to submit their Draft Red Herring Prospectus (DRHP) privately, protecting commercially sensitive data and reducing premature speculation. If the company proceeds with the IPO, the DRHP will be made public at least 21 days before filing the Red Herring Prospectus (RHP). If not, the process can be quietly withdrawn without drawing public attention.
FIRST Business Portal addressing the potential of business capability of North East Region.
