Tata Group’s NBFC to Make Market Debut: What Are the Risks and Rewards?

Summary is AI-generated, newsroom-reviewed

Tata Capital, the non-banking financial company (NBFC) is one of the most followed initial public offerings (IPOs) in September 2025.

According to a directive by the Reserve Bank of India (RBI), Tata Capital needs to list within 3 years of being notified as an ‘upper-layer’ NBFC and the deadline for this ends in September.

While there is no formal date yet, the media reports indicate the probability of a late September date.

Tata Capital, which is the Tata Group’s flagship financial services company has been ranked 4th in terms of profit after tax performance as compared to the listed entities within the Tata Group. In the NBFC space too, it is the third largest diversified non-banking financial company (NBFC) in India with a gross loan book of Rs 2,26,550 crore as of March 2025. It is also one of the fastest-growing NBFCs of India.

The initial public offering (IPO) of Tata Capital is a fresh issue and also has an offer for sale component. The total issue size is expected to be around Rs 17,000 crore, making it one of the 5 largest issues in the last decade.

A total of 47.58 crore shares are currently on offer for the book-building issue. The fresh issue is made up of 21 crore shares.

The issue price as well as the price band are not yet finalised and the company is fixing this in consultation with the book-running lead managers.

The offer also includes a reservation of equity shares for subscription by eligible employees. This portion, will however, not exceed 5% of the post-offer paid-up equity share capital.

While the funds raised from the ‘offer for sale’ will go directly to the shareholders, the remaining funds will augment the Tier-1 capital base.

The company is also planning to meet future capital requirements, including onward lending, using the proceeds of the fresh issue.

Additionally, the proceeds from the fresh issue will be used to meet the IPO expenses.