'for its much-awaited Rs 15,512 crore Initial Public Offering (IPO) at Rs'

Mumbai, Sep 29 (PTI) Non-banking financial company Tata Capital has set the price band for its much-awaited Rs 15,512 crore Initial Public Offering (IPO) at Rs 310-326 per share, making it the largest issue of the year.

At the top end of the band, the NBFC commands a valuation of about Rs 1.38 lakh crore.

The maiden public offering will open for subscription on October 6 and close on October 8, with the anchor book bidding scheduled for October 3, according to a public announcement.

The IPO, comprising a total of 47.58 crore shares, includes a fresh issue of 21 crore equity shares and an Offer For Sale (OFS) of 26.58 crore shares. At the upper price band, the issue is expected to raise Rs 15,512 crore.

Under the OFS component, Tata Sons will offload 23 crore shares, while the International Finance Corporation (IFC) will divest 3.58 crore shares. Currently, Tata Sons holds an 88.6 per cent stake in Tata Capital, while IFC owns a 1.8 per cent holding.

Proceeds from the IPO will be used to strengthen the company's Tier-1 capital base, supporting future capital requirements, including onward lending.

Tata Capital Managing Director and Chief Executive Officer Rajiv Sabharwal told reporters here that the NBFCs have been growing at a higher rate of 17-18 per cent as compared to the market growth rate of about 11 per cent and this has led to their increasing market share in the whole credit landscape.

"NBFCs have been quite innovative, have been quite nimble on both geographical expansion as well as using digital capabilities, being innovative on creating new products, and that has led them to grow at a fairly better pace than the overall growth rate in the market," he said.

This IPO will become the largest public issue in India's financial sector. It will also mark the Tata Group's second public listing in recent years, following the debut of Tata Technologies in November 2023.

The IPO is being undertaken in line with the Reserve Bank of India's (RBI) listing mandate for upper-layer NBFCs, which requires them to be listed within three years of classification. Tata Capital was designated as an upper-layer NBFC in September 2022.

Over the last few years, NBFCs have also benefited on account of NPAs in the industry being quite low, and with the new policies of RBI allowing the repo rate to come down and the liquidity to improve, he said, adding that the opportunity to grow has only become better.

"The fact that the GST cut has just come about, it is a very bold initiative of the government and I am sure it will be very positive when we look forward to growth in the coming few quarters," he said.

Citing the example of the commercial vehicle market, he said it is a large 10-lakh crore market with an average disbursement of about Rs 1.5 lakh crore every year.

"So it opens up a new market for us which we also intend to tap in the future," he said.

Stating that Tata Capital's growth rate has been amongst the best in the industry, with the company growing at a pace more than the industry growth rate, Sabharwal said that along with this near-highest growth rate, it has also ensured that its credit quality remains the best in the industry.

Since commencing lending operations in 2007, Tata Capital has served over 7 million customers as of March 31, 2025. With a portfolio of more than 25 lending products, the company caters to a diverse customer base, including salaried and self-employed individuals, entrepreneurs, small businesses, SMEs, and corporates.

In addition to lending, Tata Capital also distributes third-party products such as insurance and credit cards, offers wealth management services, and acts as a sponsor and investment manager to private equity funds.

Retail, which is consumer and housing along with SME form about 88 per cent of the Tata Capital's total book, he said and added that even if India grows at about 6.5- 7 per cent, credit will grow at about 11- 12 per cent.

And if you look at the past trends, then retail and SME are growing at a much faster rate than the overall credit rate. And that growth is closer to about 17- 18 per cent, he said.

"So we are present in the segment which is seeing the best possible growth rate in the industry," Sabharwal stated.

He said the company has also invested a lot in building its digital journeys with an investment of over Rs 2,000 crore in this space over the last 4-5 years and has digitized all its products be it consumer, housing, SME or corporate. from originating the loan to underwriting, which means when we make our decisions to give out credit.

Of late, the company, he said, has also been investing in the Gen AI space.

"We do believe that it has the potential to transform a lot of things which we are doing. With Gen AI, our response and our service levels can only become better, at a cheaper operating cost," he said.

"If you look at the overall landscape, we do believe that as we move into the future, we will continue to invest in the area of technology so that our offerings can become more unique and better for our customers. The benefit of all of what we do in terms of building our capabilities as well as investing in best-in-class platforms or using analytics to the core allows us to keep our growth at a high level and our credit costs at a low level," Sabharwal said.

The company's credit costs have been amongst the lowest in the industry and profits have been growing at a healthy pace, he said.

For the financial year 2024-25, Tata Capital reported a profit after tax (PAT) of Rs 3,655 crore, up from Rs 3,327 crore in FY24. Revenue also witnessed a sharp increase to Rs 28,313 crore in FY25 from Rs 18,175 crore in the previous year. PTI IAS SP MR