Tata Capital, a prominent non-banking financial company (NBFC), is set to make waves in India's financial sector with its ambitious plans for a $2 billion initial public offering (IPO). The move comes as the company races to meet the Reserve Bank of India's (RBI) September 30 deadline for upper-layer NBFCs to list on stock exchanges.

IPO Details

The proposed IPO is structured to include:

• 210 million new shares
• 266 million shares offered for sale by existing shareholders

Tata Sons, which currently holds an 88.6% stake in Tata Capital, plans to offload 230 million shares as part of the offering. Additionally, the International Finance Corporation (IFC) will sell 35.8 million shares from its 1.8% stake in the company.

Regulatory Compliance

Tata Capital's IPO initiative is driven by the RBI's mandate requiring upper-layer NBFCs to go public within three years of being designated as such. The company received this classification in September 2022, making the upcoming IPO a crucial step in adhering to regulatory requirements.

Market Significance

If successful, this IPO would mark significant milestones:

• It would become the largest public issue in India's financial sector to date
• It represents the Tata Group's second public listing following Tata Technologies in November 2023

Financial Performance

Tata Capital's recent financial results underscore its strong market position:

The company's impressive year-on-year growth in both net profit and total income demonstrates its robust financial health and market potential.

Investor Roadshow

To gauge market interest and attract potential investors, Tata Capital is currently conducting an investor roadshow for the planned share sale. This strategic move aims to build momentum and generate buzz around the upcoming IPO.

As the September 30 deadline approaches, all eyes will be on Tata Capital's IPO, which promises to be a landmark event in India's financial landscape. The success of this offering could set new benchmarks for the NBFC sector and further solidify the Tata Group's position in the public markets.

Tata Capital, a prominent non-banking financial company (NBFC), has reported a remarkable surge in its financial performance for the quarter ended June, while simultaneously moving forward with its plans for a substantial initial public offering (IPO).

Impressive Quarterly Results

The company's consolidated net profit for the April-June quarter reached Rs 1,040.93 crore, more than doubling from Rs 472.21 crore in the corresponding quarter of the previous year. This represents a staggering 120% year-on-year increase in profitability.

Tata Capital's total income also saw a significant uptick, rising to Rs 7,691.65 crore from Rs 6,557.40 crore in the same quarter last year, indicating robust growth across its business segments.

Preparations for Mega IPO

In a move that has caught the attention of investors and market watchers alike, Tata Capital has filed updated draft papers for an initial public offering (IPO) valued at approximately Rs 17,200 crore ($2 billion). This sizeable offering is expected to value the company at around Rs 94,600 crore ($11 billion).

The proposed IPO structure includes:

• Total offering: 47.58 crore shares
• Fresh issue: 21.00 crore shares
• Offer for sale: 26.58 crore shares

Key Stakeholders in the Offer for Sale

The offer for sale component of the IPO will see participation from two major shareholders:

1. Tata Sons: Set to divest 23.00 crore shares
2. International Finance Corporation (IFC): Planning to sell 3.58 crore shares

Currently, Tata Sons holds a commanding 88.6% stake in Tata Capital, while IFC owns a 1.8% stake.

Regulatory Compliance and Market Position

Tata Capital's move towards going public aligns with the Reserve Bank of India's (RBI) mandate for upper-layer NBFCs to list within three years of classification. The company was designated as an upper-layer NBFC in September 2022, underlining its significant position in India's financial landscape.

Looking Ahead

As Tata Capital prepares to enter the public market, its strong financial performance and the backing of the Tata Group are likely to generate considerable interest among investors. The successful execution of this IPO could potentially reshape the landscape of India's NBFC sector and provide Tata Capital with additional resources to fuel its growth strategies.

Investors and market analysts will be closely watching the developments surrounding this IPO, given its potential to be one of the largest public offerings in the Indian financial services sector in recent times.