Tata Capital to launch $2B IPO in September last week
What's the story
Tata Capital, the financial services arm of the Tata Group, is gearing up for a $2 billion (approximately ₹17,200 crore) initial public offering (IPO) in the week starting September 22, 2025, according to PTI. The move comes as part of its strategy to strengthen its capital base and support future growth. The company is eyeing an $11 billion valuation with this IPO.
Offer details
IPO details and major shareholders
The proposed IPO will offer a total of 47.58 crore shares, including a fresh issue of 21 crore equity shares and an offer for sale (OFS) of 26.58 crore shares. Tata Sons plans to sell 23 crore shares in the OFS, while the International Finance Corporation (IFC) will offload 3.58 crore shares. Currently, Tata Sons holds an 88.6% stake in Tata Capital, and IFC holds a minority stake of about 1.8%.
Fund utilization
Proceeds to strengthen capital base, meet RBI listing requirements
The proceeds from the IPO will be used to bolster Tata Capital's Tier-1 capital base, meeting future capital needs, including onward lending. The move is in line with the Reserve Bank of India (RBI)'s listing requirement for upper-layer non-banking financial companies (NBFCs), which mandates them to get listed within three years of being classified as such.
Financial stability
Financial performance and asset quality
Tata Capital has been consistent in its performance with total gross loans of ₹2.26 lakh crore as of March 2025, a CAGR of 37% between FY23 and FY25. Its profit after tax stood at ₹3,646.6 crore in FY25, up from ₹3,029.2 crore in FY23 (CAGR of 10%). Despite rapid growth, asset quality has remained strong with consolidated gross bad loans at 1.9% and net bad loans at 0.8% as of end-FY25.
Business expansion
Lending business and other services offered by Tata Capital
Since starting its lending business in 2007, Tata Capital has catered to over seven million customers as of March 31, 2025. Apart from lending, the company also distributes third-party products such as insurance and credit cards. It provides wealth management services and serves as a sponsor and investment manager to private equity funds.