Tata Capital files papers at SEBI for ₹15,000 crore upcoming IPO via confidential route; Tata Sons, IFC to sell shares

Tata Capital IPO: Tata Group has filed draft papers with the capital market regulator SEBI (Securities and Exchange Board of India) to launch its mega ₹15,000 crore Tata Capital IPO. According to a moneycontrol report, N Chandrasekaran-led conglomerate has filed its papers at SEBI to launch its most-awaited upcoming IPO, which Tata Sons and IFC own. The draft paper says that Tata Sons and IFC would offload their shareholding in Tata Capital IPO, which would be offer for sale (OFS). Tata Sons filed the draft papers through the confidential route, engaging Kotak Mahindra Capital, Citi, JP Morgan, Axis Capital, ICICI Securities, HSBC Securities, IIFL Capital, BNP Paribas, SBI Capital and HDFC Bank.

"The draft papers have been filed with the market regulator through the confidential pre-filing route. The issue will be a combination of primary and secondary issues of shares; Tata Sons and investor IFC will pare stake, with greater participation from the former," money control quoted without naming the source.

Tata Capital IPO details

On March 9, 2025, PTI reported that Tata Capital is likely to file preliminary papers with markets regulator Sebi to raise USD 2 billion (over ₹17,000 crore) through an initial public offering (IPO) only after getting final approval from the NCLT for the Tata Motors Finance merger with the company. In this report, PTI estimated Tata Capital's IPO size at $11 billion.

The National Company Law Tribunal (NCLT) awaits the final order, which is expected to be closed by the end of this financial year (FY25), the Indian news agency reported.

Tata Capital, identified by the Reserve Bank of India (RBI) as an upper-layer non-banking finance company (NBFC), has already received its board approval to float the initial share sale.

According to a disclosure made to stock exchanges, the proposed IPO would comprise 2.3 crore equity shares through a fresh issue and an offer of sale (OFS) by certain existing shareholders.

Apart from the IPO, Tata Capital announced plans to raise funds through a rights issue further to bolster its financial position before the public listing.

If successful, this would be one of the country's financial sector's most significant initial share sales. This would also be the Tata Group's second public market debut in recent years after listing Tata Technologies in November 2023.

The move is part of the company's effort to comply with the RBI's listing requirements.

As per the RBI mandate, upper-layer NBFCs are required to list on the stock exchange within three years of being designated as such. Tata Capital was categorised as an upper-layer NBFC in September 2022.

Apart from Tata Capital, another upper layer, NBFC HDB Financial Services, owned by HDFC Bank, is also gearing up to launch its IPO. The company filed its draft papers in October to garner ₹12,500 crore through the initial share sale.

While law firm Cyril Amarchand Mangaldas and investment bank Kotak Mahindra Capital have been roped in as advisors to manage the company's IPO, a draft red herring prospectus (DRHP) with Sebi will be filed only after receiving approval of the NCLT on the proposed merger, sources said.

In the Q3 earnings call of Tata Motors, the auto maker's Group CFO PB Balaji said the Tata Motors Finance creditors meeting has been completed.

"Final orders (are) awaited from the NCLT, and we do expect closure for this by the end of this financial year," he had stated.

The Competition Commission of India (CCI) cleared the proposed merger in September.

In June 2024, the boards of all three companies—Tata Capital, Tata Motors Finance, and Tata Motors — approved a merger of Tata Motors Finance with Tata Capital through an NCLT scheme of arrangement.

As consideration for the merger, Tata Capital will issue its equity shares to the shareholders of Tata Motors Finance, resulting in Tata Motors effectively holding a 4.7 per cent stake in the merged entity.

As of March 31, 2024, Tata Sons owned 92.83 per cent of Tata Capital Limited, while other Tata Group entities and IFC held the balance stake.

(With inputs from PTI)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.