Tata Capital’s IPO Gets Board Nod, 23 Crore Shares to Be Issued

Muskaan Kapoor

25 Feb 2025 — 2 min read

Tata Capital to Launch IPO, Approves INR 1,504 Crore Rights Issue

Tata Capital, the financial services arm of the Tata Group, has received board approval to proceed with an initial public offering (IPO). The company plans to issue 23 crore new shares and allow existing shareholders to sell their stakes through an offer for sale. This move complies with the Reserve Bank of India's mandate requiring "upper layer" non-banking financial companies (NBFCs) to list by September 2025. This IPO marks the first for the Tata Group since Tata Technologies went public in November 2023.

Ownership and Business Details

Tata Capital was founded in 2007 and offers different types of loans, including home and personal loans. As of March 2024, Tata Sons owns 92.8% of the company. Other Tata Group firms, select officials, external organizations, and the International Finance Corporation (IFC) hold the remaining shares.

INR 1,504 Crore Rights Issue

Along with the IPO, Tata Capital’s board has approved an INR 1,504 crore rights issue for existing shareholders. A rights issue allows current shareholders to buy more shares at a fixed price. This helps companies raise money without determining a market price through a public listing.

To prevent further expansion of its shareholder base, Tata Capital has introduced a provision preventing shareholders from waiving their rights in the rights issue until the company's shares are listed on stock exchanges.

Market Impact

After reports that Tata Capital secured board approval for its IPO, shares of Tata Investment Corporation surged over 10%, reaching an intraday high of INR 6,344 on the BSE. This sharp rise came after Tata Capital approved its plan to go public, showing strong investor optimism about the upcoming IPO.

Why This Matters

The RBI wants large NBFCs to go public to improve transparency and governance in the financial sector. Tata Capital’s decision to launch an IPO follows this guideline and strengthens its position in the market.

While the company has not yet shared details about pricing or dates, the IPO is expected to draw strong interest. The Tata Group is a well-known group, and Tata Capital is a key player in financial services.

In summary, Tata Capital's IPO and INR 1,504 crore rights issue mark a big step for the company. It helps meet RBI rules and prepares Tata Capital for growth in the stock market.