Tata Group’s NBFC Listing: Weighing Risks and Rewards

Quick Summary

• Tata Capital, a non-banking financial company (NBFC) under the Tata Group, is preparing for an initial public offering (IPO) slated for late September 2025.
• The IPO is driven by an RBI directive requiring Tata Capital to list within three years of being classified as an ‘upper-layer’ NBFC, with the deadline expiring this month.
• The total issue size of the IPO is expected to reach around Rs 17,000 crore, making it one of India’s top five largest offerings in the last decade.
• The IPO includes both a fresh issue and an offer-for-sale component. About 21 crore shares form part of the fresh issue out of a total 47.58 crore on offer.
• Funds from the fresh issue will be used to augment Tier-1 capital base, support future capital requirements such as onward lending, and meet IPO expenses. Proceeds from the offer-for-sale portion will go directly to shareholders.
• As per March 2025 data:

– Tata Capital has a gross loan book worth Rs 2,26,550 crore,
– Stands as India’s third-largest diversified NBFC,
– Ranks fourth among listed Tata Group companies based on profit after tax performance.

Indian Opinion Analysis

Tata Capital’s upcoming IPO marks a notable milestone for both its corporate journey and India’s financial markets.Complying with RBI regulations highlights increasing accountability in upper-layer NBFCs while also reinforcing regulatory oversight aimed at strengthening systemic stability.

This $17 billion offering could enhance investor participation in India’s expanding financial services sector while boosting clarity within large private lenders like Tata Capital.By directing proceeds toward Tier-1 capital augmentation and future growth initiatives such as lending expansion amidst elevated credit demand – particularly in retail loans – it signals intent toward aggressive market positioning.

Domestically listed investors may view this positively from operational scaleatgescl*>(Learn More