Sebi approves Tata Capital’s confidential DRHP for Rs 17,200 crore IPO

Synopsis

Tata Capital is nearing its ₹17,200 crore IPO launch as SEBI has cleared its draft papers. The IPO, one of the largest in the financial sector, includes a fresh share issue and an offer for sale by Tata Sons.

Tata Capital, a subsidiary of Tata Sons, is likely a step closer to launching its ₹17,200 crore initial public offering (IPO).

Market regulator Securities and Exchange Board of India (Sebi) has cleared the non-banking financial company's draft papers for the public issue, which were filed through the confidential route, said two people familiar with the development.

After the Sebi clears the confidential draft red herring prospectus (DRHP), the company files an updated draft publicly on the regulator's website. The company would then file the red herring prospectus (RHP) with the regulator just before the launch of the IPO.

Tata Capital could file for an RHP in the first week of July, according to one of the two people quoted above. An email query to Tata Capital went unanswered until Friday press time.

Tata Capital's upcoming IPO-one of the largest ever in the financial sector-will consist of both a fresh share issue and an offer for sale by Tata Sons, which owns a 93% equity stake in the company. The company had filed for a confidential DRHP on April 5.

According to Reserve Bank of India rules, Tata Sons and Tata Capital are treated as upper-layer NBFCs and are required to list by September 2025. This classification mandates the adoption of enhanced regulatory frameworks and listing within three years.

Upper-layer NBFCs are those selected by the RBI based on certain rules and criteria that require them to follow stricter regulations. In January, the RBI named 15 such NBFCs for 2024-25, including Tata Capital.

Tata Capital's unlisted shares, which have risen 13.5% in the past six months, are trading at about ₹1,050 apiece, valuing the company at about ₹3.8 lakh crore.

In the March quarter, its consolidated profit after tax rose 31% to ₹1,000 crore, up from ₹765 crore in the same period last year. Operational revenue increased nearly 50% to ₹7,478 crore compared to ₹4,998 crore a year earlier.

For the full fiscal year 2024-25, the company posted a profit of ₹3,655 crore as against ₹3,327 crore in FY24. Total revenue for the year rose to ₹28,313 crore from ₹18,175 crore.

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