Tata Capital to File IPO Draft Papers Post NCLT Merger Approval
Tata Capital, the financial services arm of the Tata Group, will file draft papers for its Initial Public Offering (IPO) after receiving final approval from the National Company Law Tribunal (NCLT) for its merger with Tata Motors Finance. According to media reports, the company is awaiting the final NCLT order before proceeding.
IPO Expected to Be Worth ₹17,000 Crore
Tata Capital’s IPO is expected to be valued at around $2 billion (₹17,000 crore). Based on this valuation, the company’s estimated market worth could be approximately $11 billion (₹95,864 crore).
NCLT Approval Anticipated by FY 2024-25 End
Reports indicate that the final NCLT order regarding Tata Motors Finance’s merger may be issued by the end of the financial year 2024-25. In June 2024, the boards of Tata Capital, Tata Motors Finance, and Tata Motors approved the merger under the NCLT Scheme of Arrangement.
CCI Approved the Merger in September 2024
As part of the merger, Tata Capital will issue equity shares to Tata Motors Finance shareholders. Consequently, Tata Motors will hold a 4.7% stake in the newly merged entity. The Competition Commission of India (CCI) approved the merger in September 2024.
Tata Sons Holds a 92.83% Stake in Tata Capital
Tata Sons is the holding company of Tata Capital, owning a 92.83% stake in the firm. The Reserve Bank of India (RBI) has classified Tata Capital as an upper-layer Non-Banking Financial Company (NBFC).
Tata Capital Must List on the Stock Exchange by 2025
As per RBI regulations, upper-layer NBFCs must be listed on the stock exchange within three years of receiving their classification. Tata Capital was designated as an upper-layer NBFC in September 2022, making it mandatory to go public by 2025.
IPO to Issue 2.3 Crore New Shares
Tata Capital’s board has approved the IPO, under which the company will issue 2.3 crore new shares. Additionally, some existing shareholders will participate in an Offer for Sale (OFS).
Ahead of its public listing, Tata Capital plans to strengthen its financial position through a rights issue. Notably, Tata Group’s Tata Technologies was listed on the stock exchange in November 2023.
