Following rumors that the salt-to-software conglomerate had started listing its financial services division, Tata Capital, through an initial public offering (IPO) of $2 billion, or approximately Rs 17,000 crore, shares of Tata group firms increased on Tuesday.
The IPO is anticipated to occur before September 2025, which is the cutoff date for fulfilling the Reserve Bank of India’s (RBI) upper-layer NBFC regulations.
In September 2022, the RBI designated Tata Capital Financial Services an upper-layer systemically significant NBFC. This designation requires listing and implementing improved regulatory frameworks within three years.
Some of these stocks saw a surge in anticipation of their shares’ value unlocking. After peaking at Rs 7,411 for the day, Tata Investment Corp’s shares closed at Rs 6,799, up 4.2%. Shares of Tata Chemicals increased 3.2% to close at Rs 1,068 while Tata Motors’ stock increased 1.9% to Rs 736. Each of these businesses owns stock in Tata Capital.
After rising from Rs 450 in December of last year to Rs 1,100 in April, Tata Capital’s unlisted shares are now trading at about Rs 900 on the unlisted market. With 3.74 billion shares outstanding by the end of FY24, the unlisted market values the company at Rs 3.5 lakh crore at this pricing.
Tata Capital had assets under management of Rs 158,479 crore as of March 2024, up significantly from Rs 119,950 crore a year earlier.
For the year ended March 31, 2024, Tata Capital reported revenue of Rs 18,178 crore, a 34% jump over FY23. The company posted a net profit of Rs 3,315 crore, a 12% year-on-year increase. The NBFC had net worth of Rs 23,417 crore as on March 31, 2024.
