In a major move that could reshape India’s financial markets, Tata Capital has taken the first step towards going public by confidentially filing draft papers with SEBI for its much-anticipated $2 billion IPO. The IPO is being pursued via the confidential pre-filing route, a regulatory innovation that allows greater flexibility and lesser public pressure for companies planning to go public.
According to insider sources, the IPO is estimated to value Tata Capital around USD 11 billion, making it one of the most significant public offerings from the financial sector in recent years.
🔍 IPO Structure and Key Details
As disclosed in a stock exchange filing, the IPO will consist of a fresh issue of equity shares and an Offer for Sale (OFS) by existing shareholders. The filing includes a plan to release 2.3 crore equity shares, each having a face value of ₹10.
This IPO would mark the Tata Group’s second market debut in recent years, following the successful listing of Tata Technologies in November 2023. If executed successfully, it could become India’s largest IPO in the financial services space.
📈 Why Tata Capital is Going Public Now
The primary motivation behind this move is regulatory compliance. In September 2022, the Reserve Bank of India (RBI) classified Tata Capital as an “upper-layer NBFC.” According to RBI guidelines, such entities are required to list on the stock exchange within three years of their classification. Hence, Tata Capital must go public before 2025 ends.
Additionally, this move opens up new capital opportunities and enhances the company’s transparency, credibility, and market valuation.
🧾 What Is the Confidential Pre-Filing Route?
Introduced by SEBI in 2022, this route allows companies to submit their Draft Red Herring Prospectus (DRHP) confidentially. The benefit? Companies can make strategic decisions about IPO timing and valuations without immediate public scrutiny.
This method is increasingly popular among top Indian firms. For instance, PhysicsWallah, Swiggy, and Vishal Mega Mart have all opted for this route. Even Tata Play and OYO previously explored it.
Unlike the traditional route which requires launching an IPO within 12 months of SEBI approval, the pre-filing path gives companies up to 18 months post final comments. Moreover, firms can adjust the issue size by up to 50% until the updated DRHP stage.
🏦 Tata Capital’s Promoters and Shareholding
Tata Sons, the holding company of the Tata Group, currently holds a 92.83% stake in Tata Capital. The upcoming IPO provides an opportunity for retail and institutional investors to participate in one of India’s leading financial institutions.
The proceeds from the fresh issue are likely to be used for expanding operations, strengthening capital adequacy, and possibly entering new markets and product segments.
📌 Additional Information & Outlook
Market analysts see this IPO as a milestone event that may set benchmarks for other NBFCs planning to list. Tata Capital’s strong brand backing, financial discipline, and regulatory alignment make it a preferred choice among investors.
As India’s financial ecosystem matures, such large-scale listings could improve market depth, transparency, and investor confidence in the NBFC sector.
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