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08 Aug, 2025
The non-banking financial services arm of Tata Sons- Tata Capital is ready to launch one of the biggest initial Public offerings(IPOs) of India’s financial sector with a proposed issue size of ₹17,200 crore. The IPO is now closer to its anticipated public launch in July 2025 after the Securities and Exchange Board of India (SEBI) accepted the company's confidential draft red herring prospectus (DRHP).
Tata Capital is a subsidiary of Tata Sons who holds 93% equity in the firm. It functions as a non-banking financial company (upper-layer NBFC) which is considered essential by the Reserve Bank of India (RBI) and requires compliance with greater regulatory scrutiny. Enhanced compliance metrics include listing on stock exchanges by September 2025. Like other upper-layer NBFCs, Tata Capital deals in personal loans, home loans, business financing, microfinance, private equity, credit services and offers them through more than 900 branches across India.
The company seems to operate as a strong issuer and has shown positive growth over the years. Tata Capital's consolidated profit after tax for FY25 stood at INR 1000 Crores attributing it with an increase of 31% year on year from the previous quarter in March where they were at INR 765 Crores. Further looking: FY25 profited them with INR 3655 crores up from 3327 crores in FY24, while total revenue rose from 18175 crores to 28313 crores.
The Tata Capital IPO will feature a dual structure, comprising a fresh issue of shares to raise growth capital and an offer for sale (OFS) by Tata Sons, which will enable the promoter to partially dilute its stake while retaining majority ownership. Tata Sons currently holds approximately 93% equity in Tata Capital and will use the OFS to provide liquidity to existing shareholders without relinquishing control.
The fresh equity raised through the IPO will primarily be used to strengthen Tata Capital’s balance sheet, support business growth and meet regulatory capital requirements mandated by the RBI for upper-layer NBFCs. The listing is also a compliance measure, as RBI requires all upper-layer NBFCs to be publicly listed by September 2025 to enhance transparency and governance standards.
The IPO price band is expected to be in the range of ₹350 to ₹400 per share, while Tata Capital’s unlisted shares have been trading around ₹1,000 per share, reflecting strong investor confidence. The company’s valuation is estimated at approximately ₹3.8 lakh crore based on recent unlisted market prices. The IPO is anticipated to generate significant investor interest given Tata Capital’s robust financials and the Tata brand’s reputation.
The ₹17,200 crore IPO of Tata Capital is certainly going to be a megatransaction in India’s financial market as it will most likely be one of the biggest listings within NBFCs and also satisfy the upper-layer regulatory requirement for NBFCs put forth by the RBI. The fresh equity issuance alongside an OFS will allow Tata Capital to strengthen its capital base while enabling liquidity to its promoters. Now that we have SEBI’s approval and the IPO is pending launch, it has become crucial for all market participants, as this could mark the first steps towards renewed confidence in financial services globally and with the Tata Group as well.
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