Tata Sons-backed Tata Capital files draft papers with Sebi for USD 2-bn IPO

Non-banking financial company Tata Capital has filed updated draft papers for a mega initial public offering (IPO), with people familiar with the matter pegging the issue size at an estimated USD 2 billion (Rs 17,200 crore).

This would value the company around USD 11 billion, they added.

According to the updated draft red herring prospectus (DRHP) filed on Monday, the proposed IPO of 47.58 crore shares comprises a fresh issue of 21 crore equity shares and an offer for sale (OFS) of 26.58 crore shares.

Under the OFS component, Tata Sons will offload 23 crore shares, while the International Finance Corporation (IFC) will divest 3.58 crore shares.

Currently, Tata Sons holds an 88.6 per cent stake in Tata Capital, while IFC owns 1.8 per cent holding.

Proceeds from the IPO will be used to strengthen the company's Tier-1 capital base, supporting future capital requirements, including onward lending.

Tata Capital, the financial services arm of the Tata Group, had earlier filed draft papers in April through the confidential pre-filing route and secured approval from market regulator Sebi in July.

As part of the process, companies are required to file an updated DRHP before submitting the final red herring prospectus (RHP).

If successful, this IPO will become the largest public issue in India's financial sector. It will also mark the Tata Group's second public listing in recent years, following the debut of Tata Technologies in November 2023.

The IPO is being undertaken in line with the Reserve Bank of India's (RBI) listing mandate for upper-layer NBFCs, which requires them to be listed within three years of classification. Tata Capital was designated as an upper-layer NBFC in September 2022.

In a similar move, HDB Financial Services -- the non-banking arm of HDFC Bank -- went public in June with a Rs 12,500-crore issue. Bajaj Housing Finance, another upper-layer NBFC, made a blockbuster market debut in September 2024, closing its first day of trade with a 135 per cent premium over the issue price.

For the financial year 2024-25, Tata Capital reported a profit after tax (PAT) of Rs 3,655 crore, up from Rs 3,327 crore in FY24. Revenue also witnessed a sharp increase to Rs 28,313 crore in FY25 from Rs 18,175 crore in the previous year.

Since commencing lending operations in 2007, Tata Capital has served over 7 million customers as of March 31, 2025. With a portfolio of more than 25 lending products, the company caters to a diverse customer base, including salaried and self-employed individuals, entrepreneurs, small businesses, SMEs, and corporates.

In addition to lending, Tata Capital also distributes third-party products such as insurance and credit cards, offers wealth management services, and acts as a sponsor and investment manager to private equity funds.

The issue is being managed by a consortium of book-running lead managers, including Axis Capital, Kotak Mahindra Capital Company, BNP Paribas, HDFC Bank, HSBC Securities and Capital Markets (India) Pvt Ltd, Citigroup Global Markets India Pvt Ltd, ICICI Securities, IIFL Capital Services, SBI Capital Markets, and JP Morgan India.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)