Tata Capital, a prominent non-banking financial company (NBFC) under the Tata Group umbrella, has announced its much-anticipated Initial Public Offering (IPO) with a price band of Rs 310-326 per share. The public offering, valued at Rs 15,511 crore, is set to open on October 6 and close on October 8, marking a significant milestone for the company.

IPO Structure and Details

The IPO comprises two components:

1. A fresh issue of up to 21 crore equity shares, amounting to Rs 6,846 crore
2. An offer for sale of up to 26.6 crore equity shares, valued at Rs 8,665 crore

In the offer for sale:

• Tata Sons, the promoter, will divest up to 23 crore shares
• International Finance Corporation plans to sell up to 3.6 crore shares

Investors interested in participating in the IPO should note that the minimum bid requirement is set at 46 equity shares, which would cost Rs 14,996 at the upper price band.

Key Dates

• IPO Opening: October 6
• IPO Closing: October 8
• Share Allotment: October 9
• Listing on BSE and NSE: October 13

Utilization of Funds

Tata Capital intends to use the proceeds from the fresh issue to bolster its tier-I capital base. This strategic move aims to support future capital requirements and facilitate onward lending, positioning the company for continued growth in the financial services sector.

Recent Financial Performance

The company has reported impressive financial results in its most recent quarter:

These figures demonstrate substantial year-over-year growth, with profit more than doubling compared to the previous year.

Tata Group's Growing Public Portfolio

Upon successful listing, Tata Capital will become the 17th company from the Tata Group to be publicly traded. This move not only expands the group's presence in the public markets but also provides investors with an opportunity to participate in the growth of a major player in India's financial services sector.

The IPO of Tata Capital represents a significant event in the Indian financial market, offering both retail and institutional investors the chance to invest in a well-established NBFC with strong backing from the Tata Group.

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:

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.