Daijiworld Media Network – Mumbai

Mumbai, Apr 5: The Tata Group has taken a major step towards launching one of the country's largest IPOs in the financial sector, filing draft papers with market regulator SEBI to raise Rs 15,000 cr through the Tata Capital IPO.

According to a Moneycontrol report, the draft papers have been filed via the confidential pre-filing route. The public offering will be an offer-for-sale (OFS) where Tata Sons and the International Finance Corporation (IFC) will offload their stakes in Tata Capital.

The IPO will comprise a combination of fresh issue of shares and OFS by existing shareholders. Tata Sons has reportedly engaged top financial institutions including Kotak Mahindra Capital, Citi, JP Morgan, Axis Capital, ICICI Securities, HSBC, IIFL, BNP Paribas, SBI Capital, and HDFC Bank to manage the offer.

Tata Capital, classified as an upper-layer non-banking financial company (NBFC) by the Reserve Bank of India, is required to go public by September 2025 as per RBI norms.

In line with this mandate, the company has already secured board approval for the IPO. The proposed issue includes 2.3 cr equity shares. In addition to the public offering, Tata Capital has also announced plans to raise capital through a rights issue.

Sources have indicated that the final filing of the draft red herring prospectus (DRHP) with SEBI will be done only after the National Company Law Tribunal (NCLT) approves the proposed merger of Tata Motors Finance with Tata Capital.

The merger, approved by the boards of Tata Capital, Tata Motors, and Tata Motors Finance in June 2024, is awaiting final clearance. The NCLT’s verdict is expected by the end of FY25.

The Competition Commission of India (CCI) has already given its nod to the merger. Once completed, Tata Motors will hold a 4.7% stake in the merged entity.

This IPO will mark the Tata Group’s second market debut in recent times after the successful listing of Tata Technologies in November 2023.

As of March 31, 2024, Tata Sons owned 92.83% of Tata Capital, while the remaining stake was held by IFC and other Tata entities.

Meanwhile, HDB Financial Services, another RBI-designated upper-layer NBFC owned by HDFC Bank, is also eyeing an IPO worth Rs 12,500 cr, having filed its draft papers in October 2024.