Tata Capital IPO: The biggest Tata Group IPO is taking one step closer to reality. As per the latest report, Tata Capital IPO has likely finalised 10 investment banks for its upcoming Rs 15,000 crore public offer. Tata Capital's IPO is the second by Tata Group in less than two years, after Tata Technologies IPO in 2023. But the issue size of Tata Capital will become Tata's biggest-ever IPO on stock exchanges.
Tata Capital IPO:
People closer to the matter told MoneyControl that Tata Group has finalized as many as 10 investment banks for the big-bang Rs 15,000 crore plus initial public offer (IPO) of the group's flagship financial services arm Tata Capital.
These investment banks are reportedly Kotak Mahindra Capital, Citi, JP Morgan, Axis Capital, ICICI Securities, HSBC Securities, IIFL Capital, BNP Paribas, SBI Capital and HDFC Bank.
Also, the sources told the news agency that Tata Capital is likely to file its draft prospectus of the IPO with market regulator Sebi by end of March 2025 or in the initial days of April. The IPO is expected to be a mixture of primary and secondary issue of shares.
However, Tata Sons have declined to comment on the matter. Accordingly, GoodReturns.In could not confirm the matter.
Earlier, another report had stated that Tata Capital IPO could offer a fresh issue of 230 million shares.
On February 25, the board also approved to carry rights issue worth Rs 1,504 crore for existing shareholders.
Tata Capital IPO was expected to be listed after its conversion into NBFC-ICC from NBFC-Core Investment Company ("CIC"). Last year, in August, RBI approved the scheme of Scheme of Arrangement for the Amalgamation of Tata Capital Financial Services Limited ("TCFSL") and Tata Cleantech Capital Limited ("TCCL"), with Tata Capital Limited ("TCL/Company"). This led to the conversion of TCL into NBFC-ICC from NBFC-Core Investment Company ("CIC") and the Certificate of Registration issued to TCFSL and TCCL were surrendered to RBI and cancelled. RBI has issued the Certificate of Registration as NBFC-ICC accordingly.
As per RBI's latest list of NBFCs in the Upper Layer (NBFC-UL) under Scale Based Regulation, Tata Capital was included as Non-deposit taking NBFC-ICC category. In terms of the framework, once an NBFC is classified as NBFC-UL, it shall be subject to enhanced regulatory requirement, at least for a period of five years from its classification in the layer, even in case it does not meet the parametric criteria in the subsequent year/s.
One of the key points to note in RBI's NBFC upper layer list is that it makes it mandatory for these NBFCs to list on stock exchanges.
If Tata Capital's IPO is announced to Rs 15,000 crore, then it will be the biggest ever IPO under Tata Group's ambit. It is also the first IPO since Tata Technologies that debuted in 2023.
The last IPO launched by Tata was in November 2023, Tata Technologies which was worth Rs 3,042.51 crore in size. Tata Technologies was the latest IPO by Tata Group since 2004 when Tata Consultancy Services (TCS) IPO was launched. TCS which is now the flagship company of Tata Group, had an IPO size of Rs 4,713.47 crore. Hence, Tata Capital at a Rs 15,000 IPO would emerge as the largest by Tata Group.
As per the annual report for 2023-24, Tata Capital crossed 1 lakh year disbursals which is for the first time by the company. It recorded disbursals of Rs 1,05,244 crore, up 40% YoY. The company's loan book growth was 35% YoY to Rs 1,57,761 crore as of March 2024. It also posted the highest-ever net profit after tax to Rs 3,150 crore, up by 37% YoY. Its return on equity remains healthy at 17.6%.
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