Tata Capital Considers IPO in 2025, Aiming for Jio Financial-like Valuation, Reports Suggest

Tata Group’s Tata Capital Ltd is restructuring its operations and expanding its board as part of the Group’s plan to take the non-bank lender public, according to the report.

“The Tata group is targeting an IPO for Tata Capital in 2025. The board has been expanded, and mergers of some of the group firms under Tata Capital have been done as a part of the IPO plan,” Mint reported citing sources.

The group is reportedly eyeing a similar listing to that of Mukesh Ambani’s Jio Financial Services Ltd last month.

“Currently, it is a work in progress, with the IPO process to begin in March 2024 with the appointment of investment bankers,” company sources quoted in the report said.

As per the RBI guidelines, an ‘upper-layer’ NBFC must list within three years of being notified. On September 14, 2023, the Reserve Bank of India (RBI) classified both Tata Capital and parent Tata Sons Ltd among the 16 ‘upper tier’ NBFCs.

Tata Sons, the parent company of the Tata Group, is also likely to get listed soon, which could make it India’s biggest one yet. After being classified as an ‘upper-layer’ NBFC by RBI last week, Tata Sons also needs to gear up for its share listing on or before September 2025.

On September 14, the central bank released a list of 15 NBFCs, with Tata Sons and Tata Capital named in the upper tier category, requiring higher regulatory compliance. The central bank has classified NBFCs into base layer (NBFC-BL), middle layer (NBFC-ML), upper layer (NBFC-UL) and top layer (NBFC-TL).
Under RBI guidelines, NBFC-ULs have to implement a board-approved policy for adopting the enhanced regulatory framework applicable to them and mandatorily list within three years of this.

“We will comply with RBI guidelines,” said Rajiv Sabharwal, the managing director of Tata Capital.

On August 8, 2023, fair trade regulator Competition Commission of India (CCI) approved the merger of Tata Cleantech Capital and Tata Capital Financial Services into Tata Capital Ltd. Tata Capital Financial Services (TCFSL) and Tata Cleantech Capital Ltd are RBI-registered non-deposit accepting non-banking financial companies. Both companies are subsidiaries of Tata Capital Ltd (TCL).

The proposed combination is a merger of Tata Capital Financial Services Ltd and Tata Cleantech Capital Ltd into Tata Capital Ltd.

TCL is an RBI-registered non-deposit-accepting core investment company which holds investments in its subsidiaries, which are engaged in lending and offering a wide array of services and products in the financial services sector.

(With inputs from agencies)

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