Tata Investment shares jump 5% amid report that Tata Capital eyes $11 bn valuation for IPO

Shares of Tata Investment Corporation (TICL) rallied 5% in an otherwise bearish broader market amid report that Tata Capital was eyeing a valuation of $11 billion for its upcoming initial public offering (IPO). Tata Capital is a non-banking financial company and a subsidiary of the group's holding company Tata Sons. As of date, Tata Investment Corporation owns over 2% stake in Tata Capital, while its parent, Tata Sons holds nearly 93% shares in the NBFC company.

Early today, Tata Investment shares opened flat at ₹5,931.35 after ending 2.66% lower in the previous session on the BSE. The Tata group stock gained as much as 5% to hit a high of ₹6,231, while the market capitalisation climbed to ₹30,460 crore.

TICL shares have witnessed sharp correction in the recent time, in line with the BSE midcap index. The stock touched its 52-week low of ₹5,147.15 on February 17, 2025, falling 47% from its 52-week high of ₹9,744.40 hit on March 7, 2024.

The share price of TICL has fallen nearly 25% in the past 12-month as compared to over 3% correction in the BSE midcap index, while it dropped 12% year-to-date (YTD) versus 17% slump in the midcap index. The TICL shares plummeted 18% in the past six months and 12% in 3 months, against a rise of nearly 2% in a month.

Tata Capital eyes $11 bn valuation for its upcoming IPO

Tata Group is eyeing a valuation of around $11 billion for the upcoming public issue of Tata Capital, which is touted to be India’s largest IPO of the year, as per Bloomberg report. The financial and investment company looks to raise up to $2 billion via IPO route. The report also suggests that the IPO would be a combination of fresh equities and share sale by promoters and existing shareholders through offer for sale.  

As per the shareholding pattern of Tata Capital, Tata Sons directly own 92.83% stake in the company and the remaining stake is owned by the other Tata group companies and trusts as on March 31, 2024. On the other hand, Tata Motors and Tata Chemicals own 3% each in Tata Sons, which is mostly owned by Dorabji Tata Trust (28%) and the Ratan Tata Trust (24%). Among others, Tata Power and Indian Hotels hold 2% and 1%, respectively, in the holding company, while Cyrus Mistry family-led Sterling Investment Corporation and Cyrus Investments own 9% each in Tata Sons.

Tata Capital’s IPO is being seen as a move to comply with Reserve Bank of India’s (RBI) norms for 'upper layer' NBFCs. Tata Capital was notified as an upper-layer NBFC in September 2022, which makes it mandatory to list itself on the exchanges within three years of notification. The deadline for the same is September 2025. 

In October last year, the central bank approved the merger of Tata Capital with Tata Motors Finance (TMFL), paving the way for the formation of India’s 12th largest NBFC. As of March 31, 2024, Tata Capital had sizeable AUM of ₹158,479 crore as compared to ₹119,950 crore as on March 31, 2023, and ₹94,349 crore as on March 31, 2022.

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