Tata Capital IPO: A Comprehensive Guide for Indian Investors
Tata Capital Ltd, the financial services arm of the Tata Group, is all set to launch its initial public offering (IPO) on Oct. 6, 2025. The issue will close on Oct. 8, 2025, as per the company’s red herring prospectus. In this article, we will delve into the details of the IPO, including the issue size, promoter shareholding, and how the company plans to utilize the proceeds from the fresh issue.
IPO Details: Issue Size and Promoter Shareholding
The IPO will comprise a fresh issue of up to 21 crore equity shares and an offer for sale (OFS) of up to 26.6 crore equity shares. Promoter Tata Sons will divest up to 23 crore shares, while International Finance Corporation (IFC) will sell up to 3.6 crore shares through the OFS route. The company will also issue up to 21 crore shares via a primary raise.
Currently, Tata Sons owns an 88.6% stake in the NBFC on a fully diluted basis, while other Tata group companies own another 7%. IFC currently holds 7.16 crore shares worth a 1.8% stake in the firm.
Utilization of IPO Proceeds
Tata Capital proposes to use the fresh issue proceeds for augmenting its tier–I capital base to meet its ‘future capital requirements, including onward lending,’ arising out of the growth of the business. Further, a portion of the proceeds from the fresh Issue will be used towards meeting offer expenses.
The company’s decision to raise capital through an IPO is a strategic move to strengthen its financial position and support its future growth plans. As the financial services arm of the Tata Group, Tata Capital plays a crucial role in providing financial solutions to individuals and businesses across various sectors.
Book Running Lead Managers and IPO Schedule
Kotak Mahindra Capital Co., Axis Capital Ltd., BNP Paribas, Citigroup Global Markets India Pvt. and HDFC Bank Ltd. are the book running lead managers for the issue. Tata Capital plans no pre-IPO placement ahead of its market debut.
Once the listing goes through, Tata Capital will be the 17th Tata Group company to be publicly traded. This is a significant milestone for the company and a testament to its growth and success over the years.
Financial Performance: A Review of Q1 Results
In the quarter ended June, the NBFC posted a revenue of Rs 7,664.81 crore in comparison to Rs 6546.28 crore posted in the same quarter last year. The company’s profit for the quarter more than doubled at Rs 1,040.93 crore, against Rs 472.21 crore reported in the quarter ended June 2024.
For fiscal year 2025, the Tata’s financial services arm reported a profit of Rs 3,655 crore, an increase from Rs 3,327 crore in the previous fiscal, while its revenue surged to Rs 28,313 crore from Rs 18,175 crore. These numbers demonstrate the company’s strong financial performance and its ability to deliver growth and profitability.
Investment Rationale: Why Invest in Tata Capital IPO?
So, why should Indian investors consider investing in the Tata Capital IPO? Here are a few reasons:
- Strong Parentage: As a part of the Tata Group, Tata Capital benefits from the group’s strong reputation and brand image.
- Diversified Business Model: The company has a diversified business model, with a presence in various financial services sectors, including commercial finance, consumer finance, and investment banking.
- Experienced Management Team: Tata Capital has an experienced management team, with a proven track record of delivering growth and profitability.
- Strong Financial Performance: The company has consistently delivered strong financial performance, with growing revenue and profitability.
However, as with any investment, there are also risks and challenges associated with investing in the Tata Capital IPO. Investors should carefully evaluate these factors before making an investment decision.
Conclusion: A New Chapter for Tata Capital
In conclusion, the Tata Capital IPO is a significant event for Indian investors, offering an opportunity to invest in a leading financial services company with a strong parentage and diversified business model. With its experienced management team, strong financial performance, and growth plans, Tata Capital is well-positioned to deliver long-term value to its shareholders.
As the company prepares to list on the stock exchanges, Indian investors should keep a close eye on the Indian stock market news and IPO news for updates on the listing and the company’s future plans.