Tata Sons to Dilute Stake in Tata Capital Through Landmark IPO

In a significant move, Tata Sons is set to dilute its stake in Tata Capital by nearly 10 percentage points through an initial public offering (IPO). This strategic offering includes a fresh issue of 21 crore shares and an offer for sale of 26.6 crore shares, totaling 47.6 crore shares. Tata Sons will offload 23 crore shares, while International Finance Corporation (IFC) will sell 3.6 crore shares.

IPO Size and Post-Listing Stake Details

Market sources indicate that the issue size is likely to be around ₹17,200 crore. Post-IPO, Tata Sons' holding in Tata Capital is expected to decrease from 88.6% to approximately 78.8%, yet it will retain a controlling stake of over 75%. This IPO is in compliance with RBI's regulations requiring upper-layer non-bank lenders to list within three years of classification.

Growth and Financial Highlights

The fresh issue aims to expand Tata Capital's equity base to 4.24 billion shares from the current 4.03 billion. The proceeds will bolster the company's growth and strengthen its balance sheet. As of March 31, 2025, Tata Capital reported total assets of ₹24.85 lakh crore, a significant increase from ₹13.56 lakh crore in FY23. The company's gross loan book reached ₹22.66 lakh crore, growing at a CAGR of 37.3% over the last two fiscal years.

Expanding Reach and Future Plans

Following its merger with Tata Motors Finance, Tata Capital is focused on deepening its presence across lending segments. With a network of 1,496 branches in 1,102 locations, it serves 7 million customers and employs nearly 30,000 people. The company also collaborates with over 30,000 direct selling agents, 400 OEMs, and 8,000 dealers. Its mobile apps have been downloaded more than 21 million times.

Future initiatives include expanding its product suite, enhancing digital distribution, improving risk management, and maintaining credit ratings. Tata Capital also aims to optimize funding costs and invest in analytics and technology to enhance efficiency and customer experience. The company holds a valid NBFC licence and a factoring registration from the RBI, with no current plans to convert into a bank.