Tata Capital’s board announced on Tuesday its plans for an initial public offering (IPO) comprising 23 crore fresh shares and an offer for sale of equity shares by eligible shareholders. Additionally, the board approved a rights issue not exceeding ₹1,504 crore.
Listing & IPO details
The company has not provided specific details regarding the IPO listing timeline. However, as per RBI guidelines, the upper layer NBFCs, including Tata Capital, should be listed on the stock exchanges by September 2025. The total size of the IPO is expected to be around ₹15,000 crore.
In the unlisted market, Tata Capital’s stock is reported to have surged from ₹800-825 to ₹1,000-1050 recently. However, brokerages anticipate the stock to list around ₹500-700.
Manan Doshi, co-founder of Unlisted Arena, mentioned in a Bloomberg report that the current share price values the company at 13 times its book value, which may seem expensive compared to similar companies.
H1FY25 performance
Tata Capital, based in Mumbai, recorded a 21% year-on-year increase in net profit for H1FY25, amounting to ₹1,825 crore. The company’s loan book saw a 33% increase, while the net interest margin (NIM) including fees stood at ₹5,208 crore, and credit costs amounted to ₹581 crore in H1FY25.
Shareholding pattern
Tata Capital is the financial services arm of Tata Sons Pvt Ltd, with Tata Sons holding a 92.8% stake as of March 2024. The listed entity Tata Investment Corporation owns about 2% stake in the company. Following the IPO announcement, Tata Investment Corporation’s stock surged 7% on the National Stock Exchange, closing at ₹6,158.15.
Other Tata Group companies with investments in Tata Capital include Tata Chemicals, Tata Motors, Tata Consumer Products, and Tata Power Company. Tata Consumer Products closed at ₹1,004.95 on the NSE, up 0.25%. However, Tata Chemicals, Tata Motors, and Tata Power Company closed in the red, declining over 1%.
Trading across different segments will remain closed today due to Mahashivratri. The BSE and the National Stock Exchange will resume operations as usual on February 27, 2025.
