Tata Capital, the financial services arm of the Tata Group, has announced a rights issue worth Rs 1,752 crore, ahead of its planned initial public offering (IPO), as per a report by Business Standard.
The company, as Business Standard highlighted, has informed the stock exchanges about the decision on Thursday, June 26 and the IPO is likely to take place by September this year.
Tata Sons to subscribe major chunk of the issue
Tata Sons, the holding company of the Tata Group, is expected to subscribe to Rs 1,630 crore of the issue, according to Business Standard. The rights issue is part of the company’s capital-raising plans as it prepares for its $2 billion IPO, likely to take place by September this year.
Tata Capital’s IPO is poised to be one of the biggest listings in India’s financial services sector in 2025.
Board clears debt raising of up to Rs 30,000 crore
At the same board meeting, Tata Capital also received approval to raise up to Rs 30,000 crore through various debt instruments, reports Business Standard. These include secured and unsecured debentures, subordinated and perpetual bonds, market-linked instruments, and green bonds.
The debt will be raised in one or more tranches via private placements. The funds will be used for on-lending purposes, the company said.
Tata Sons holds 93% in Tata Capital
Tata Sons currently owns 93 per cent of Tata Capital. In the previous rights issue in March, Tata Sons had invested Rs 1,400 crore out of the total Rs 1,504 crore raised. The remaining stake in Tata Capital is held by Tata Investment Corporation, the TCL Employee Welfare Trust, and other minority shareholders.
Tata Capita IPO driven by RBI directive
The move to go public comes in response to the Reserve Bank of India’s mandate requiring all upper-layer non-banking financial companies (NBFCs) to list by September 2025. Tata Capital has already secured the necessary approval from the Securities and Exchange Board of India (SEBI) for its IPO, sources said Business Standard.
Tata Sons seeks NBFC reclassification
Meanwhile, Tata Sons has reportedly cleared all its outstanding bank loans and has approached the RBI to be reclassified and removed from the list of upper-layer NBFCs, as per Business Standard. The central bank is currently reviewing the request.