Tata Group stocks saw a significant rally on Tuesday following reports of the group’s plans to launch an IPO for Tata Capital, its financial services arm. Shares of Tata Investment, Tata Technologies, and Tata Motors were among the top gainers, showcasing robust investor enthusiasm.
By the afternoon session, key Tata Group stocks demonstrated strong performance:
- Tata Investment Corporation: Up by 12%
- Tata Technologies: Up by 4%
- Tata Chemicals: Up by 3%
- Tata Motors: Up by 2%
- TCS: Marginally up by 1%
What Do We Know About the Tata Capital IPO?
According to a report by Moneycontrol, the Tata Group has initiated discussions with advisors to launch the Tata Capital IPO by next year. The group has engaged Cyril Amarchand Mangaldas as legal counsel and Kotak Mahindra Capital as the investment banker for the process.
While the IPO size is yet to be finalized, industry speculation suggests a potential offering of ₹15,000 crore, likely comprising both primary and secondary share sales.
This move aligns with the Reserve Bank of India’s (RBI) circular mandating upper-layer NBFCs to list within three years of their classification. Tata Capital, designated as an upper-layer NBFC in September 2022, has until September 2025 to comply with this directive.
Why Tata Capital IPO Is Making Waves
The IPO is poised to generate significant interest due to the RBI’s regulations and the precedent set by similar companies. In September, Bajaj Housing Finance successfully listed and achieved a staggering 135% premium over its issue price, drawing attention to the value potential in NBFC listings.
For Tata Capital, the IPO represents a critical opportunity to unlock value and strengthen its market position.
Stakeholders in Tata Capital
Following a merger approved in June 2024 under the NCLT scheme, Tata Motors Finance Limited (TMFL) was merged into Tata Capital. As part of the merger, Tata Capital issued equity shares to TMFL shareholders.
Post-merger, Tata Motors holds a 4.7% stake in Tata Capital, adding to its value proposition as a beneficiary of the IPO.
Key Takeaways
Tata Capital’s IPO plans have triggered excitement among investors, evident in the rally across Tata Group stocks. With a potential offering size of ₹15,000 crore and the credibility of Tata Group, this IPO is expected to be a landmark event in the Indian financial markets.
As the group gears up to comply with regulatory mandates and capitalize on favorable market conditions, investors are watching closely for further developments.
