Tata Capital Files Revised DRHP For IPO As RBI Deadline Nears: Key Details

Tata Capital IPO: Tata Capital has filed an updated draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (Sebi) on August 4, 2025, for its proposed initial public offering (IPO). The Tata Group’s flagship financial services company plans to raise funds through a combination of a fresh issue and an offer for sale.

Tata Capital’s updated DRHP comes after its merger with Tata Motors Finance Ltd (TMFL). The merger became effective on May 8, 2025. TMFL’s entire business, including its assets, liabilities, and operations, was transferred to Tata Capital.

Tata Capital, a subsidiary of Tata Sons Private Ltd, was incorporated on March 8, 1991, as Primal Investments & Finance Limited in Mumbai and started operations on April 1, 1991. Later, it was renamed as Tata Capital Ltd on May 8, 2007.

Tata Capital IPO Details

Total Offer Size: According to the DRHP, Tata Capital will issue up to 47.58 crore equity shares with a face value of Rs 10 each.

Fresh Issue: The Tata Capital IPO will include a fresh issue of 21 crore equity shares.

Offer For Sale: The Tata Capital IPO will also include an offer for sale (OFS) component of 26.58 crore equity shares.

Promoter Holding: Currently, promoter entities hold 95.6 per cent, or 385.55 crore shares, in the company. Tata Sons holds 88.6 per cent of the company, IFC owns 1.8 per cent, and the remaining stake is held by other Tata group companies and trusts.

Listed Stakeholders: Tata Investment Corporation, Tata Motors, Tata Chemicals, Tata Power, and Tata Consumer Products are also among the promoters of the company and are listed on the exchanges.

Selling Promoters: Tata Sons Private Ltd will offload 23 crore shares and International Finance Corporation (IFC) will sell 3.58 crore shares under the OFS. Tata Sons Private Ltd, the promoter, will continue to hold a majority stake in the company even after the listing.

Price Band, Lot Size: This has yet to be announced. The price band and lot size will be finalised closer to the opening date, the company said in its DRHP.

Employee Reservation: Up to 5 per cent of the post-offer equity will be reserved for eligible employees. The allocation will initially be capped at Rs 2 lakh per employee and may go up to Rs 5 lakh if there is undersubscription in this category.

BRLMs: The book-running lead managers to the issue are Axis Capital Limited, Kotak Mahindra Capital Company Limited, ICICI Securities Limited, HDFC Bank Limited, SBI Capital Markets Limited, IIFL Capital Services Limited, Citigroup Global Markets India Private Limited, J.P. Morgan India Private Limited, HSBC Securities and Capital Markets (India) Private Limited, and BNP Paribas.

Tata Capital Expected Listing Date

The Reserve Bank of India (RBI) had introduced a scale-based regulatory framework for non-banking financial companies (NBFCs) in 2021. Under this framework, some large NBFCs are classified as upper layers because of their size and importance to the financial system. RBI made it mandatory for these NBFCs to list on the stock exchanges to improve transparency, strengthen corporate governance, and allow better public scrutiny of their operations.

As per RBI rules, an NBFC identified in the Upper Layer must complete its stock market listing within three years of receiving the classification notice. Tata Capital, which was placed in the Upper Layer in September 2022, is required to list by September 2025.

Tata Capital IPO Objectives

According to the DRHP, the primary purpose of Tata Capital IPO is to raise fresh capital to strengthen its Tier-I capital base. The company plans to use the proceeds from the fresh issue to improve its capital adequacy ratio, meet regulatory requirements, and create additional buffers to support its future lending growth.

The IPO does not include any pre-IPO placement. Tata Sons Private Ltd, the promoter, will continue to hold a majority stake in the company even after the listing.

Tata Capital Financial Performance

Tata Capital reported a total income of Rs 2.83 lakh crore in FY25, a 56 per cent year-on-year (y-o-y) growth from Rs 1.81 lakh crore in FY24. The increase was mainly driven by loan book expansion, higher interest income, and the addition of Tata Motors Finance Ltd’s portfolio after the merger.

Net profit for FY25 stood at Rs 36,647 crore, up 16.33 per cent y-o-y from Rs 31,502 crore in FY24. Net worth rose to Rs 3.25 lakh crore during the year. Earnings per share (EPS) were reported at Rs 9.3 compared to Rs 8.6 in the previous year.

The company recorded a return on equity (RoE) of 12.6 per cent and a return on assets (RoA) of 1.8 per cent for FY25. Provision coverage ratio stood at 58.5 per cent.

Tata Capital’s credit cost was 1.4 per cent, and the capital adequacy ratio was at 16.9 per cent, above the regulatory requirement of 15 per cent. Total assets were reported at Rs 24.8 lakh crore, while the gross loan book reached Rs 2.26 lakh crore, as of March 31, 2025.

Tata Capital Loan Book Overview

Tata Capital had a total gross loan book of Rs 2.26 lakh crore as of March 31, 2025. The loan book grew at a compound annual growth rate (CAGR) of 37.3 per cent from March 31, 2023. Loans to retail and SME customers accounted for 88.5 per cent of the total portfolio.

More than 99 per cent of loan accounts had a ticket size below Rs 1 crore. About 79 per cent of the loans were secured. The organic book made up over 99 per cent of total gross loans.

About Tata Capital

The company has served 7 million customers since it started lending in 2007. It offers more than 25 lending products to retail, SME, and corporate clients. Tata Capital had 1,496 branches across 27 states and union territories as of March 31, 2025. The branch network, excluding Tata Motors Finance Ltd, grew at a CAGR of 45.6 per cent over the last three years.

Apart from lending, Tata Capital also operates non-lending businesses. These include the distribution of third-party insurance and credit cards, wealth management services for high-net-worth and retail clients, and a private equity business focused on growth, healthcare, and other thematic funds.