Tata Capital files updated DRHP for IPO; key details on offer size, financials, and more

Tata Sons-backed non-banking financial company (NBFC), Tata Capital has filed its updated draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for a highly anticipated initial public offering (IPO). The N. Chandrasekaran-led conglomerate filed its draft papers through the confidential route in April this year, for which it reportedly received approval in late June.

The Tata Capital IPO is expected to be one of the biggest public issues in India’s financial services sector, and it is looking to raise around ₹17,000 crore, according to Prime Database.

The IPO is a combination of fresh issuance of equity shares and an offer for sale (OFS) of a total of 47.58 crore shares of face value of ₹10 each. The NBFC will issue up to 21 crore new equity shares, while existing shareholders will offload up to 26.58 crore shares.

Under the OFS, Tata Sons proposes to offload up to 23 crore shares, while the International Finance Corporation (IFC) intends to sell up to 3.58 crore shares. Currently, promoter entities hold 95.6%, or 385.55 crore shares, in the company, with Tata Sons owning the major chunk at 88.6%. IFC holds 7.16 crore shares, or a 1.8% stake, in Tata Capital.

The remaining stake is owned by the other Tata group companies and trusts, including TMF Holdings, Tata Investment Corporation, Tata Motors, Tata Chemicals, Tata Power, Tata International, and Tata Consumer Products.

The company will use the capital proceeds from the fresh issue to augment its tier-1 capital base to meet its future capital requirement, including onward lending.

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 listing is September 2025. 

Ahead of the IPO filing, Tata Capital raised ₹1,500 crore via a rights issue this year, with Tata Sons and other small shareholders, including IFC, subscribing to the issue.

Besides, it raised another $400 million through its maiden issuance from international bond markets, maturing in three and a half years for investors in Asia and Europe. The company says it will pay an interest of 5.38% on the dollar-denominated bonds.

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. 

According to a Crisil report mentioned in the DRHP, Tata Capital is the third largest diversified NBFC in India with total gross loans of ₹2,26,550 crore as of March 31, 2025, growing at a CAGR of 37.3% from March 31, 2023, to March 31, 2025. The company offers financing products to a diverse set of customers with a focus on retail and SME customers, which constituted 88.5% of its total gross loans as of March 31, 2025. Retail finance had gross loans of ₹1,41,114 crore, comprising 62.3% of its total gross loans, while SME finance gross loans stood at ₹ 59.463 crore.

The company has a pan-India presence through 1,496 branches spanning 1,102 locations across 27 States and Union territories.

Kotak Mahindra Capital, BNP Paribas, Citigroup Global Markets are among the bookrunning lead managers of the offering.

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