Tata Capital Plans ₹17,000 Crore IPO After NCLT Approval on Tata Motors Finance Merger

Tata Capital is set to file for a ₹17,000 crore ($2 billion) IPO with SEBI but will wait for the final approval from the National Company Law Tribunal (NCLT) on its merger with Tata Motors Finance. The approval is expected by the end of FY25, as per reports.

Projected Valuation and IPO Structure

With an estimated valuation of $11 billion, Tata Capital’s IPO will include a fresh issue of 2.3 crore equity shares and an offer for sale (OFS) by select shareholders. Additionally, the company plans a rights issue to strengthen its financial position ahead of the listing.

Regulatory Compliance and Competitive Landscape

As an upper-layer NBFC, Tata Capital must list on the stock exchange by 2025, per RBI regulations. Another upper-layer NBFC, HDB Financial Services (owned by HDFC Bank), has also filed for an IPO to raise ₹12,500 crore.

Advisors and Next Steps

Law firm Cyril Amarchand Mangaldas and Kotak Mahindra Capital are managing Tata Capital’s IPO. The draft red herring prospectus (DRHP) will be filed only after the NCLT merger approval.

Merger and Shareholding Structure

The merger, approved by Tata Capital, Tata Motors Finance, and Tata Motors, will result in Tata Capital issuing shares to Tata Motors Finance shareholders. Post-merger, Tata Motors will hold a 4.7% stake in Tata Capital, while Tata Sons remains the majority stakeholder with a 92.83% stake.

Conclusion

Tata Capital’s IPO is poised to be one of the largest in India’s financial sector, following Tata Technologies’ successful listing in 2023. With regulatory approvals pending, the listing process is expected to accelerate once the NCLT clears the merger.

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