Tata Capital Gears Up for Mammoth $2 Billion IPO in Early October
Tata Capital Ltd., a major NBFC under the Tata Group, is set to launch a $2 billion IPO in early October. The offering includes share sales from Tata Sons and International Finance Corp., along with new shares from Tata Capital. The company filed its DRHP with SEBI on August 4, complying with RBI's listing mandate for upper-layer NBFCs. Tata Capital's recent financial results show strong growth, with Q2 consolidated net profit up 120.4% year-over-year. Grey market interest indicates shares trading near ₹775, though the official IPO price is expected to be lower.
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Tata Capital Ltd., a prominent non-banking financial company (NBFC) under the Tata Group umbrella, is set to make waves in the Indian financial sector with its upcoming initial public offering (IPO). The company is preparing to launch a substantial $2 billion IPO in early October, marking a significant milestone in India's financial landscape.
IPO Structure and Details
The IPO structure reveals a comprehensive approach to share distribution:
- Tata Sons, the principal shareholder, plans to sell up to 23 crore shares
- International Finance Corp. will offload 3.58 crore shares
- Tata Capital itself will issue up to 21 crore new shares through a primary raise
This diverse offering is designed to create a balanced opportunity for both existing shareholders and new investors.
Regulatory Compliance and Timeline
Tata Capital filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on August 4, setting the stage for the IPO process. The company's move to go public aligns with the Reserve Bank of India's (RBI) mandate for upper-layer NBFCs, which requires listing within three years of classification. Tata Capital received its upper-layer NBFC designation in September 2022, making this IPO a timely compliance measure.
Financial Performance
Tata Capital's recent financial results underscore its strong market position:
| Financial Metric | Q2 | Q2 Previous Year | YoY Change |
|---|---|---|---|
| Consolidated Net Profit | ₹1,040.93 | ₹472.21 | 120.4% increase |
| Total Income | ₹7,691.65 | ₹6,557.40 | 17.3% increase |
These figures demonstrate substantial year-over-year growth, potentially bolstering investor confidence in the upcoming IPO.
Market Expectations
While the official IPO price is yet to be determined, the grey market has shown significant interest. Reports indicate that shares were trading near ₹775 in the grey market, although the actual IPO price is expected to be set lower to ensure attractive valuation for potential investors.
Significance in the Market
This IPO is poised to become the largest public issue in India's financial sector, highlighting the robust appetite for quality financial stocks in the market. It follows the successful debut of Tata Technologies in November 2023, marking the second major IPO from the Tata Group in recent years.
The size and scope of Tata Capital's IPO underscore the company's significant role in India's financial services landscape and its potential for future growth. As the early October launch date approaches, market watchers and potential investors will be keenly observing this landmark offering in India's capital markets.
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