Tata Investment Corporation Zooms 12% on Tata Capital IPO Buzz: All You Need to Know

Shares of Tata Investment Corporation (TICL) surged by 12% to ₹7,314 apiece on the NSE in early trade on Tuesday, December 12, amid reports that Tata Capital, a key subsidiary of the Tata Group, is preparing to launch a ₹15,000 crore IPO. The proposed IPO has generated significant market interest, with expectations that it will mark a major milestone in Tata Group’s financial services expansion.  

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Tata Capital IPO Details  

Tata Capital is a non-banking financial services (NBFC) firm and a subsidiary of Tata Sons, the principal investment holding company of the Tata Group. The IPO is reportedly being undertaken to comply with the Reserve Bank of India’s (RBI) mandate that all NBFCs classified under the "upper layer" must list their shares by September 2025.  
The IPO is expected to be a blockbuster, with the offering exceeding ₹15,000 crore, although the final quantum is yet to be determined. Advisors for the offering include law firm Cyril Amarchand Mangaldas and investment bank Kotak Mahindra Capital, with pitches to other investment banks expected soon. Sources indicate the IPO structure will likely involve a combination of primary and secondary share issuance.  

Tata Capital recently underwent a merger with Tata Motors Finance (TMFL), which was approved by the RBI in October. This merger created India’s 12th largest NBFC and positioned Tata Capital to meet regulatory requirements and boost its market standing.  

As of March 31, 2024, Tata Capital reported assets under management (AUM) of ₹158,479 crore, up from ₹119,950 crore in the previous fiscal year. Tata Sons holds a 92.83% stake in Tata Capital, underscoring its strategic importance within the group.  

Tata Technologies: A Successful Predecessor  

The buzz around the Tata Capital IPO comes after the resounding success of Tata Technologies' IPO, which debuted on November 30, 2023. The IPO saw a massive premium of 140% over its issue price of ₹500, reflecting robust investor confidence. The public issue was entirely an offer for sale (OFS) of 6.08 crore equity shares, with a price band of ₹475-₹500 per share.  
The IPO was oversubscribed 69.43 times, making it a landmark event as Tata Technologies became the first Tata Group company to go public in nearly two decades since Tata Consultancy Services (TCS) in 2004. The success of Tata Technologies set the stage for the group's renewed focus on public listings, including Tata Capital's upcoming offering.  

Conclusion  

The Tata Capital IPO signals the conglomerate’s intent to comply with regulatory mandates while unlocking value for its stakeholders. With Tata Technologies' stellar debut in 2023, expectations for Tata Capital’s listing are high. Investors see this as an opportunity to participate in the Tata Group's financial services growth story, further bolstered by Tata Capital's robust AUM and strategic mergers. As the IPO preparations gain momentum, market participants eagerly await updates on what could be one of India’s largest NBFC listings.