Tata Capital, the financial services arm of the Tata Group, has taken a significant step toward its $2 billion Initial Public Offering (IPO) by filing draft papers through the confidential pre-filing route. This strategic move aligns with the Reserve Bank of India’s (RBI) mandate for upper-layer non-banking finance companies (NBFCs) to list on the stock exchange within three years of being designated as such. Tata Capital was categorized as an upper-layer NBFC in September 2022.
The IPO, expected to value the company at approximately $11 billion, will consist of a fresh issue of equity shares alongside an offer for sale (OFS) by existing shareholders. Tata Sons, the holding company of Tata Capital, currently owns a dominant 92.83% stake in the firm. If successful, this IPO will mark one of the largest initial share sales in India’s financial sector and the Tata Group’s second public market debut in recent years, following the listing of Tata Technologies in November 2023.
The confidential pre-filing route, increasingly popular among Indian companies, allows firms to withhold public disclosure of details under the draft red herring prospectus (DRHP) until later stages. This approach provides greater flexibility, enabling companies to adjust the primary issue size by up to 50% until the updated DRHP stage and extend the IPO timeline to 18 months from SEBI’s final comments.
As Tata Capital prepares for its public market debut, industry experts are closely monitoring the developments, which could set a precedent for future IPOs in India’s financial sector. The move reflects Tata Capital’s commitment to compliance and growth, positioning it as a key player in the evolving financial landscape.
