Tata Capital files DRHP for IPO

Mumbai, 5 August 2025: Tata Capital Limited, the financial services arm of the Tata Group, has officially filed its Updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI) for its highly anticipated Initial Public Offering (IPO). The proposed issue comprises a mix of fresh equity shares and an Offer for Sale (OFS), with a total offering size of 47,58,24,280 equity shares.

The IPO is poised to be one of the largest in the financial services space, with the price band and bidding dates to be disclosed in due course. The equity shares are proposed to be listed on both the BSE and NSE.

₹47.58 Cr Equity Offer Includes Both Fresh Issue and Promoter Stake Sale

According to the DRHP, Tata Capital plans to raise capital through a two-part structure:

• Fresh Issue: Up to 21,00,00,000 equity shares
• Offer for Sale: Up to 26,58,24,280 equity shares

As part of the OFS, Tata Sons Private Limited, the Promoter Selling Shareholder, will divest 23,00,00,000 equity shares, while International Finance Corporation (IFC), the Investor Selling Shareholder, will offer 3,58,24,280 equity shares.

IPO Proceeds to Boost Tier-I Capital and Fund Lending Growth

The company intends to utilise the net proceeds from the fresh issue primarily to strengthen its Tier-I capital base, enabling future business expansion and onward lending. This capital injection is aimed at improving the company’s ability to serve a broader base of retail, SME, and corporate borrowers.

Promoter Holding at 88.6% Pre-IPO; IFC Holds 1.8% Stake via Merger

As per the UDRHP, Tata Sons holds 88.6% of Tata Capital’s pre-offer equity share capital. Other Tata Group entities hold a combined 7.0%, while IFC owns 1.8%, which it received following the merger of Tata Motors Finance Limited (TMFL) with Tata Capital.

Merger with TMFL Strengthens Tata Capital’s Lending Platform

In a key development, Tata Motors Finance Limited was merged with Tata Capital, effective 8 May 2025, with the appointed date as 1 April 2024. Following this merger, TMF Holdings was allotted 18.39 crore equity shares of Tata Capital. This consolidation has enabled the company to streamline its lending business across retail and commercial segments and expand its customer base.

Tata Capital: A Pan-India NBFC with ₹20.84 Lakh Cr in Borrowings

Incorporated in 1991 and rebranded in 2007, Tata Capital Limited operates as a systemically important non-banking financial company (NBFC) and is currently classified as an Upper Layer NBFC by the Reserve Bank of India (RBI).

Post-merger, Tata Capital offers over 25 financial products covering consumer loans, SME finance, infrastructure lending, leasing, and wealth management. As of March 31, 2025, it had served over 7 million customers through 1,400+ branches across India. Its total borrowings stood at ₹20,84,149 million.

Financial Performance: PAT Rises to ₹36,647 Mn in FY25 Amid Income Surge

Tata Capital reported robust financial growth in FY25. Its total income surged to ₹2,83,699 million, up from ₹1,81,984 million in FY24 and ₹1,36,375 million in FY23 — reflecting a year-on-year (YoY) growth of over 55.9% from FY24. Profit After Tax (PAT) for FY25 reached ₹36,647 million, a steady increase from ₹31,502 million in FY24 and ₹30,292 million in FY23.

Net worth improved from ₹2,35,402 million in FY24 to ₹3,25,878 million in FY25, demonstrating stronger capital buffers. However, Return on Equity (ROE) declined from 20.6% in FY23 to 12.6% in FY25, reflecting the impact of increased capital following the merger. Gross Stage 3 loans ratio, a measure of asset quality, rose slightly from 1.5% in FY24 to 1.9% in FY25, still within manageable levels.

CRAR at 16.9% Remains Above Regulatory Threshold, Ensuring Capital Strength

Tata Capital maintained a Capital to Risk-Weighted Assets Ratio (CRAR) of 16.9% as of March 31, 2025, comfortably exceeding the minimum regulatory requirement. This reflects the company’s focus on maintaining financial resilience even while expanding its loan book.

Ten Lead Managers Appointed to Steer IPO, MUFG Intime as Registrar

The IPO is being managed by a consortium of ten Book Running Lead Managers (BRLMs) including:

• Kotak Mahindra Capital
• Axis Capital
• Citi
• J.P. Morgan
• ICICI Securities
• HDFC Bank
• SBI Capital Markets
• BNP Paribas
• HSBC
• IIFL Capital

MUFG Intime India Pvt Ltd has been appointed as the Registrar to the issue.

Tata Capital Eyes Listing on BSE and NSE; Offer Price to Be Finalised Soon

The equity shares are proposed to be listed on both the BSE and NSE, with the designated stock exchange yet to be confirmed. The final offer price, determined through the book-building process, will be announced closer to the bidding window.

Tata Capital’s IPO is set to mark a significant milestone in the evolution of India’s non-banking financial services sector. Backed by Tata Sons, the company’s expanding retail and corporate lending footprint, rising customer base, and improving earnings underscore its growth story. As the firm prepares to list, investors will closely watch for the final pricing and subscription details, which are expected to draw keen interest across categories.

REF: https://www.bseindia.com/corporates/download/13271/IPO Prior/TataCapitalLimitedUDRHPI_20250804185001.pdf

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