Tata Capital announces IPO plan: IFR
India's Tata Capital said it plans to launch an IPO which will comprise 230m primary shares and an undisclosed secondary component.
The company did not indicate the size and timing of the float. Market participants expect it to raise up to Rs150bn (US$1.72bn).
Additionally, Tata Capital said it is planning a rights issue of up to Rs15bn, with shareholders on the company's books as of February 25 eligible to participate.
Kotak is working on the IPO and more banks are likely to join the syndicate.
Non-banking finance company Tata Capital is a subsidiary of Tata Sons.
The IPO is being planned to comply with the Reserve Bank of India's requirement for "upper layer" non-banking financial companies to list on the country's stock exchanges within three years of being included in this category. Tata Capital was declared an upper layer NBFC by the RBI on September 30 2022.
Both Tata Capital and Tata Sons have to list by September 2025.
As the parent of a complex conglomerate with multiple listed entities already, Tata Sons has been seeking an exemption from the Reserve Bank of India as going public would involve complying with demanding disclosure requirements and may limit its flexibility to make investments.
Bajaj Housing Finance, which also had to list by September 2025, raised Rs65.6bn from an IPO in September, while HDFC Bank subsidiary HDB Financial Services, another company on the RBI list, has filed with the Securities and Exchange Board of India for an IPO of Rs125bn.
Tata Capital's revenue in the nine months December was Rs126.9bn, up 35% from Rs94.2bn a year earlier. Net profit rose 20% to Rs20.7bn from Rs17.2bn.
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