The board of Tata Capital, Tata Group’s financial services arm, has approved raising funds through an initial public offering (IPO) and a rights issue, according to an exchange filing. The non-banking finance company (NBFC) will raise up to ₹1,504 crore via the rights issue and issue up to 23 crore new shares for the IPO. An offer for sale may be conducted, subject to market conditions and regulatory approvals.
The Reserve Bank of India’s (RBI) guidelines mandate that upper-layer NBFCs, including Tata Capital, be listed by September this year. Tata Capital’s parent company, Tata Sons, meanwhile, has filed an application with the RBI to deregister itself as an NBFC-core investment company. The RBI had last month included Tata Sons in the upper-layer list but said their application to deregister is under consideration.
Tata Capital’s loan book stood at Rs 1.76 lakh crore as of September 2024, up 33 per cent year-on-year (y-o-y), and net interest margin plus fees stood at 6.4 per cent. Credit cost more than doubled to ₹581 crore in H1FY25, while net profit for H1FY25 was at ₹1,825 crore, up 21 per cent on-year. Retail loans form 64 per cent of the overall advances, with home loans and loans against property dominating the retail loan mix.
Last month, the NBFC raised $400 million through its maiden international bond, which has an interest rate of 5.38 per cent. The senior unsecured bond’s tenor is 3.5 years, and proceeds will be deployed in business operations, including lending.
According to traders, shares of Tata Capital in the unlisted markets have jumped to the ₹1,000-1,050 range from ₹800-825 a week ago. Shares of Tata Investment, which holds about 2 per cent of Tata Capital, ended trading 7 per cent higher at ₹6,169.20 apiece on the BSE today.
