Tata Investment Surges 10% as Tata Capital Announces IPO Plans

Tata Investment Corporation’s share price surged by 10% in Tuesday’s trading session, reaching ₹6,220.75 on the National Stock Exchange (NSE). This sharp rise followed Tata Capital’s approval of its initial public offering (IPO) plans.

Tata Capital and Its IPO Plans

Tata Capital, a non-banking financial services (NBFC) company and a subsidiary of Tata Sons, announced its IPO, which will consist of a fresh issue of shares with a face value of ₹10 each, totaling ₹23 crore.

The offering will also include an offer for sale (OFS) by select existing shareholders, though details regarding the size of the OFS and the selling shareholders remain undisclosed.

According to Tata Capital’s regulatory filing, the OFS will be subject to market conditions, regulatory approvals, and other relevant factors.

Additionally, the company’s board has approved a rights issue worth ₹1,504 crore for existing shareholders, with February 25, 2025, set as the record date.

Upon completion, Tata Capital will become the first Tata Group company to go public in over 15 months, following Tata Technologies’ listing in November 2023.

Notably, this marked the first IPO of a Tata Group company since Tata Consultancy Services (TCS) nearly two decades earlier.

RBI Classification and Market Implications

The Reserve Bank of India (RBI) has categorized Tata Capital as an upper-layer NBFC for the 2024-2025 financial year, mandating that it must go public by September 2025.

Tata Investment Share Price Trends

On Tuesday, Tata Investment’s shares jumped by 10.32%, reaching a peak of ₹6,343.80.

As of 11 AM, the stock was trading 8% higher at ₹6,205.55 per share. Over the past five years, the stock has rallied over 588.12%, though it has experienced a 12% decline over the past year. In the last six months, however, it has gained over 2%.

The surge in Tata Investment’s stock was driven by the news that Tata Capital’s board had approved its IPO. At 10:45 AM, the stock remained 8% higher at ₹6,210 per share, compared to a 0.32% rise in the benchmark BSE Sensex index.

Over the past week, Tata Investment’s share price increased by 21%, whereas the Sensex declined by 2%.

According to reports, Tata Capital’s IPO will include a fresh issue of approximately 230 million shares, while the quantity of shares to be sold via OFS is yet to be confirmed.

The company is expected to raise around ₹15,000 crore through the primary markets.

Tata Capital’s Shareholding Structure

Currently, Tata Sons holds a 93% stake in Tata Capital, while Tata Investment Corporation holds over 2%.

Other key shareholders include Tata group companies (2.46%), International Finance Corporation (1.91%), and the Employee Welfare Trust (1.16%), with the remaining 1.64% held by other stakeholders.

On February 1, 2025, Tata Capital’s board approved amendments to its memorandum of association and adopted a new set of articles of association (AoA), facilitating the IPO process for Tata Sons’ financial services arm.

Tata Investment Corporation’s Response

Tata Investment Corporation has yet to issue an official clarification regarding the IPO.

However, Tata Capital confirmed its approval of the IPO plans, which will involve a combination of a fresh issue of 23 crore equity shares and an OFS by existing shareholders.

While Tata Capital has not disclosed further details on its public float, the company, established in 2007, offers a broad range of financial services, including housing and personal loans.

Regulatory Compliance and Industry Trends

Tata Group’s move aligns with RBI’s regulatory requirements, which mandate that upper-layer NBFCs must be publicly listed within three years of notification.

Tata Capital Financial Services, which merged with Tata Capital in January 2024, falls under this regulation.

Another NBFC, Bajaj Housing Finance, recently debuted in the market, achieving a 135% premium over its IPO issue price on its first trading day.

Financial Strength and Market Standing

As per a September report by Crisil Ratings, Tata Capital had assets under management (AUM) of ₹158,479 crore as of March 31, 2024.

Tata Sons directly owns 92.83% of Tata Capital’s equity shares, with the remainder held by other Tata group entities and trusts.

Crisil Ratings also highlighted Tata Sons’ capital infusion into Tata Capital over the past five years.

Since fiscal 2019, Tata Sons has infused ₹6,097 crore into the company, including ₹2,500 crore in fiscal 2019, ₹1,000 crore in fiscal 2020, ₹594 crore in fiscal 2023, and ₹2,003 crore in fiscal 2024.

This capital injection underscores Tata Group’s commitment to strengthening its lending business.