The wait is over, Tata Capital files DRHP with the Securities and Exchange Board of India (SEBI) through the confidential filing route. This sets the stage for a massive public listing valued at over INR 15,000 crore—a key milestone in the group’s expansion strategy.
Tata Capital is a subsidiary and the NBFC arm of Tata Sons, and soon it will tap the primary markets. Some industry reports suggest that the Tata Capital IPO will be a combination of Fresh+OFS. Tata Sons and investor International Finance Corporation (IFC) will reduce their stake via OFS.
Tata Capital’s decision to go public is in line with the Reserve Bank of India’s (RBI) regulatory requirements. The central bank mandates that “upper layer” NBFCs list their shares within three years of being notified. That deadline will end in September 2025.
To meet with the RBI’s norms, there was a recent restructuring, merging its financial services arm with Tata Sons. Tata Capital has now moved closer to fulfilling that requirement.
What is Confidential Route?
Tata Capital has chosen the confidential route for filing, which was introduced by the SEBI in 2022. It allows companies to keep sensitive business details hidden until a final decision is made on the listing. By using this way, Tata Capital doesn’t expose strategic information to rivals in the highly competitive financial services space.
Lead Managers
Tata Capital IPO is being managed by ten merchant bankers, their names are: Kotak Mahindra Capital, Citi, JP Morgan, Axis Capital, ICICI Securities, HSBC Securities, IIFL Capital, BNP Paribas, SBI Capital and HDFC Bank.
This alliance will guide Tata Capital until a successful listing and managing relationships with investors.
Tata Sons: Keeping Control
Tata Sons held a commanding 92.83% stake in Tata Capital as of the previous year’s filings on 31 March 2024. The rest is held by other Tata Group entities and the International Finance Corporation. After the Tata Capital IPO listing, Tata Sons is expected to retain a majority stake in the company, expected to be around 75%. That means Tata Capital will remain under the Tata Group’s control.
Tata Capital had an asset under management of INR 1,58,479 crore. That’s up significantly from INR 1,19,950 crore in 2023 and INR 94,349 crore in 2022.
Merger and Market Context
In January 2024, Tata Capital Financial Services merged with Tata Capital. The company is now in the process of merging Tata Motors Finance (TMFL) with Tata Capital. However, this is subject to regulatory approvals.
Conclusion
The company is thinking strategically to navigate the complex regulatory environment while keeping its business interests. Tata Capital’s confidential filing is backed by Tata Sons and a very experienced advisory team behind it. We can see that Tata Capital is poised for a transformative phase as it prepares to enter the stock market.
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