Tata Capital to launch USD 2-bn IPO in first half of October

New Delhi, Sep 11 (PTI) Tata Capital is likely to launch its much-anticipated USD 2 billion (over Rs 17,000 crore) initial public offering (IPO) in the first half of October after the Reserve Bank of India (RBI) has granted an extension to list its shares on the bourses, according to people familiar with the matter.

Earlier, the non-banking finance company was given a timeline of September 30 to list on the stock exchanges.

The company is eyeing USD 2 billion through its maiden public offering at a valuation of USD 18 billion. This was a sharp jump from the USD 11 billion valuation ascribed when Tata Capital filed confidential IPO papers in April.

Tata Capital's offering would be the biggest in the country after Hyundai Motor India's USD 3.3 billion (Rs 27,870 crore) IPO in October 2024.

"While the RBI had given a timeline of September 30, it has allowed for an extension due to procedural reasons," people familiar with the matter told PTI.

Market observers noted that large IPOs often see such extensions. For instance, NSDL's Rs 4,000-crore IPO was given an extension from Sebi by over four months before the offering finally opening in July.

As per the updated Draft Red Herring Prospectus (DRHP) filed in August, the IPO will comprise a fresh issue of up to 21 crore equity shares and an offer for sale (OFS) of up to 26.58 crore shares, totalling 47.58 crore shares.

Promoter Tata Sons will divest up to 23 crore shares, while International Finance Corporation (IFC) will offload up to 3.58 crore shares.

Currently, Tata Sons owns 88.6 per cent of Tata Capital, with IFC holding 1.8 per cent.

Proceeds from the fresh issue will be deployed to augment Tier-I capital and fuel lending growth.

If successful, 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 RBI's 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.

In a similar move, HDB Financial Services -- the non-banking arm of HDFC Bank -- went public in June with a Rs 12,500 crore issue. Bajaj Housing Finance, another upper-layer NBFC, made a blockbuster market debut in September 2024, closing its first day of trade with a 135 per cent premium over the issue price.

Tata Capital had wrapped up a series of investor roadshows across major global financial hubs -- Hong Kong, Singapore, London, New York, and key Indian cities. The roadshows, launched in August, drew strong participation from both global and domestic institutional investors.

The company delivered strong financials in Q1 FY26, reporting a net profit of Rs 1,041 crore, more than double the Rs 472 crore earned a year earlier. Total income climbed to Rs 7,692 crore from Rs 6,557 crore in the June 2024 quarter. PTI SP HVA