Tata Capital Files Confidential DRHP with SEBI for Upcoming IPO


Tata Capital, a key financial services subsidiary of the Tata Group, has initiated the process for a public listing by confidentially submitting its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI). The company is planning an Initial Public Offering (IPO) worth approximately ₹15,000 crore, marking a major milestone in its expansion and compliance journey.

Taking the Confidential Route

SEBI's introduction of the confidential pre-filing option in 2022 allows companies to privately file their IPO documents for regulatory review. Tata Capital has taken advantage of this option, allowing for internal assessments and revisions based on SEBI's feedback before formally going public with the IPO details.

IPO Structure and Key Participants

The upcoming IPO is expected to include a fresh issue of around 230 million shares, along with an offer for sale (OFS) from current shareholders such as Tata Sons and the International Finance Corporation (IFC). Tata Sons holds the majority ownership of about 93% in Tata Capital, and IFC is also a significant stakeholder.

Regulatory Push and Corporate Strategy

Under the Reserve Bank of India’s norms, Tata Capital is classified as an upper-layer NBFC, which mandates a stock market listing by September 2025. To align with this requirement, the company has been actively restructuring—one major move includes the proposed merger of Tata Motors Finance into Tata Capital. The deal has already secured clearance from the Competition Commission of India and is now awaiting approval from the National Company Law Tribunal.

Strong Financials Support Market Entry

Tata Capital has seen impressive financial growth, with its assets under management (AUM) climbing to ₹1.58 lakh crore as of March 2024, compared to ₹1.19 lakh crore the previous year. This growth demonstrates the company’s strength and readiness for a successful public offering.

IPO Advisors and Next Steps

To ensure a smooth listing process, Tata Capital has partnered with a consortium of top investment banks including Kotak Mahindra Capital, JP Morgan, Citi, Axis Capital, ICICI Securities, and others. The IPO launch will be determined based on regulatory approvals and prevailing market conditions.

With this move, Tata Capital not only aims to meet regulatory obligations but also set the stage for future growth and investor engagement in India's dynamic financial services space.

Disclaimer:

The information provided in this article is for general informational purposes only and does not constitute investment advice, financial guidance, or a recommendation to invest in any securities, including those related to Tata Capital. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. While efforts have been made to ensure the accuracy of the information, the author and publisher make no representations or warranties regarding the completeness, reliability, or suitability of the content.

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