Tata Capital Set for IPO: Major Share Price Surge for Tata Investment Following Announcement

Tata Sons has approved a rights issue for Tata Capital during a recent board meeting, with plans for the Tata Capital board to decide on the size and timing of the issue soon. As the majority stakeholder with a 93% ownership, Tata Sons intends to fully subscribe to its portion of the rights issue. Additionally, Tata Capital is gearing up for its initial public offering (IPO), which will be the Tata Group’s second in two decades, featuring a fresh issue of 23 crore equity shares alongside an offer for sale (OFS) from existing shareholders.

Following the IPO announcement, Tata Investment Corporation’s share price surged by 10%. The IPO will include shares with a face value of ₹10 each, totaling ₹23 crore, and the rights issue approved by Tata Capital’s board is worth ₹1,504 crore for existing shareholders, with a record date set for February 25, 2025. To comply with Reserve Bank of India regulations, Tata Capital is required to go public by September 2025.

Tata Capital Set for IPO: Major Share Price Surge for Tata Investment Following Announcement

Tata Sons has approved a rights issue for Tata Capital, the financial services division of the Tata group, during a board meeting held on Monday. Sources indicate that the Tata Capital board will convene on Tuesday to determine the size and timing of the rights issue. As the majority stakeholder with a 93% ownership in Tata Capital, Tata Sons plans to fully subscribe to its allocated portion of the issue. Tata Sons has not responded to an email inquiry regarding this matter. This rights issue will set a benchmark price for the company.

Tata Capital is preparing for its initial public offering (IPO), marking the Tata Group’s second IPO in the past two decades after the successful launch of Tata Technologies in November 2023. The board has approved the IPO structure, which will include a fresh issue of 23 crore equity shares and an offer for sale (OFS) by existing shareholders.

Tata Sons, the holding company with a 93% stake in Tata Capital, is expected to remain a significant shareholder post-listing. Tata Capital encompasses various financial services within the group, including Tata Capital Financial Services, Tata Capital Housing Finance, and Tata Cleantech Capital, as well as investment and advisory services like Tata Securities and Tata Capital Singapore.

Before launching the IPO, Tata Capital’s board has also approved a rights issue of up to Rs 1,504 crore for existing shareholders.

Tata Investment Corporation’s share price surged by 10% in intra-day trading on Tuesday, reaching ₹6,220.75 on the National Stock Exchange (NSE), following Tata Capital’s announcement of its plans for an initial public offering (IPO). Tata Investment holds more than a 2% stake in Tata Capital, which is a subsidiary of Tata Sons.

Tata Capital’s IPO will feature a fresh issue of shares with a face value of ₹10 each, totaling ₹23 crore, alongside an offer for sale (OFS) from select existing shareholders. The specifics of the OFS, including its size and the identities of the selling shareholders, have yet to be disclosed. According to Tata Capital’s filings, the OFS will depend on market conditions, regulatory approvals, and other relevant factors.

Additionally, Tata Capital’s board has approved a rights issue worth ₹1,504 crore for existing shareholders, with the record date set for February 25, 2025. The rights issue price and entitlement ratio are still pending finalization.

Once completed, Tata Capital will be the first Tata Group company to go public in over 15 months, following Tata Technologies’ listing in November 2023, which was the group’s first IPO since TCS nearly two decades ago. The Reserve Bank of India (RBI) has classified Tata Capital as an upper-layer Non-Banking Financial Company (NBFC) for 2024-2025, and the company is required to go public by September 2025 to comply with RBI regulations.

Tata Investment shares experienced a significant increase, climbing as much as 10.32% to a high of ₹6,343.80 during the day. As of 11 AM, the stock was trading 8% higher at ₹6,205.55. Over the past five years, Tata Investment shares have increased by more than 588.12%, although they have declined over 12% in the past year while gaining over 2% in the last six months.