Tata Capital is set to move ahead with its $2 billion (over ₹17,000 crore) initial public offering (IPO) only after securing final approval from the National Company Law Tribunal (NCLT) for the merger of Tata Motors Finance with the company, PTI reported citing sources.
The NCLT’s decision is expected by the end of FY25, it added.
Business Today was unable to verify the development independently.
Tata Capital, classified as an upper-layer non-banking finance company (NBFC) by the Reserve Bank of India (RBI), has already received board approval to proceed with the IPO.
The offering will include 2.3 crore equity shares, comprising a fresh issue and an offer for sale (OFS) by select existing shareholders, as per stock exchange disclosures. In addition to the IPO, Tata Capital is also planning a rights issue to strengthen its financial position ahead of the listing.
If successful, this will be one of the largest IPOs in India’s financial sector and the Tata Group’s second major public market debut in recent years, following Tata Technologies’ listing in November 2023.
The IPO aligns with regulatory requirements, as RBI mandates that upper-layer NBFCs must list within three years of their classification. Tata Capital was designated as an upper-layer NBFC in September 2022.
HDB Financial Services, another upper-layer NBFC owned by HDFC Bank, is also preparing for an IPO and filed its draft papers in October to raise ₹12,500 crore.
Law firm Cyril Amarchand Mangaldas and investment bank Kotak Mahindra Capital have been appointed as advisors for Tata Capital’s IPO. However, the draft red herring prospectus (DRHP) will be filed with SEBI only after the NCLT clears the merger, as per the PTI report.
During Tata Motors’ Q3 earnings call, Group CFO PB Balaji confirmed that the creditors’ meeting for Tata Motors Finance had been completed. “Final orders (are) awaited from the NCLT, and we do expect closure for this by the end of this financial year,” he said.
The Competition Commission of India (CCI) approved the proposed merger in September 2023. In June 2024, the boards of Tata Capital, Tata Motors Finance, and Tata Motors approved the merger under an NCLT scheme of arrangement. Post-merger, Tata Capital will issue equity shares to Tata Motors Finance shareholders, giving Tata Motors a 4.7% stake in the merged entity.
Tata Capital is primarily owned by Tata Sons, which holds a 92.83% stake in the company.
https://akm-img-a-in.tosshub.com/businesstoday/images/story/202503/67cd81da7debd-the-offering-will-include-23-crore-equity-shares–comprising-a-fresh-issue-and-an-offer-for-sale-o-095604946-16×9.jpg
2025-03-09 11:56:17
