Tata Capital’s ₹1,500 Crore Fundraising & IPO Plan

Tata Capital Ltd (TCL) has secured ₹1,500 Cr. in fresh funding through a rights issue. Tata Sons, which holds a 93% stake in the company, fully subscribed to its share, while smaller shareholders, including the International Finance Corporation (IFC), also participated. This move comes as TCL prepares for an expansion in lending.

The capital infusion will help TCL improve its leverage ratio, which has already seen an improvement from 7.2x in FY22 to 6.3x by September 2024. These figures have been confirmed by Fitch. With stricter regulatory norms applicable due to its classification as an Upper Layer NBFC by the RBI, TCL is actively working on maintaining strong financial metrics.

A major milestone for the company is its upcoming IPO, planned for September 2025. TCL is expected to raise approximately ₹17,000 Cr. through this offering, and ten banks have been appointed to manage the process. Post-IPO, Tata Sons' stake in TCL will fall below 75%, complying with regulatory listing norms.

Beyond the IPO, TCL is also tapping global markets for funds. The company plans to raise up to $750 million via External Commercial Borrowings (ECB) as part of its $2 billion medium-term note program. In December, it sought RBI approval for raising over $750 million from international sources, while Tata Capital Housing Finance separately applied to raise $200 million. HSBC and Standard Chartered have been appointed as joint book-runners for the issue.

Additionally, TCL is preparing to issue a dollar-denominated senior unsecured bond with a three-year tenure, maturing in December 2028. This fundraising will allow TCL to expand its lending operations while maintaining financial stability.