Economic Times • March 5, 2025
Shares of Tata Capital, the financial services arm of diversified Tata Group, have been gaining traction in the unlisted market after the company announced plans to launch an IPO. The news around public listing has given a boost for the company's shares, which are currently trading at just over Rs 1,000
At the current price, the market cap of the company is around Rs 3.88 lakh crore, according to analysts who track the unlisted space. The shares have jumped 20% from two weeks earlier, which then attracted a price of around Rs 895.
Most of the companies from Tata Group that listed on the exchanges rewarded investors with healthy returns, and it is understandable that there is a strong buzz in the unlisted market about another IPO coming from the Bombay house.
Tata Capital will offer 23 crore shares under the fresh issue route of the IPO along with an offer for sale (OFS) component.
The company was forced to take the public route after it was classified as "upper-layer NBFC" by the Reserve Bank. Under the regulator's rules, NBFCs with a certain size and scale are required to list on the stock markets so that there is more transparency and adherence to strict norms.
The IPO, which is to be completed by September this year, will be the first Tata Group company to go public since Tata Technologies in November 2023.
Tata Capital, in which Tata Sons has a 93% stake, is strategically important to the Tata Group because it caters to the funding requirements of various entities associated with the conglomerate, such as its suppliers, vendors and dealers.
In FY24, Tata Capital reported a revenue of Rs 18,178 crore, a 34% jump over FY23. The company's loan book crossed Rs 1 lakh crore with a growth of 40% YoY and the profits were highest ever at Rs 3,150 crore.
For the first half of the current fiscal, the growth momentum continued with profit growing 21% to Rs 1,825 crore.
Along with the IPO, the company has also separately also approved a Rs 1504 crore rights issue. The company had also raised Rs 594 crore through a similar rights issue in FY23.