Tata Capital trims valuation to around $15.7 billion ahead of IPO launch

A price band of Rs 310-326 per share was set according to a public advertisement released on September 29.

Tata Sons-owned and IPO-bound Tata Capital, the flagship financial services firm of the diversified Tata Group, has decided to reduce its post-money equity valuation by 5 percent ahead of the launch of the mega issue between October 6 to October 8, multiple industry sources told Moneycontrol.

"The decision to trim the valuation by 5 percent was taken over the weekend. Now it stands at around $15.7 billion or Rs 1,39,000 crore as compared to the earlier planned $16.5 billion or Rs 146,000 crore" said one of the persons above.

A second person confirmed the same. Both spoke on the condition of anonymity.

A price band of Rs 310-326 per share was set according to a public advertisement released on September 29.

At the upper end of the price band, the size of the issue now stands at $1.75 billion or Rs 15,540 crore as compared to the earlier proposed $1.85 billion or Rs 16,400 crore.

A third person also confirmed the trim in valuation. "It's a good will gesture by the Tata's to leave more on the table for investors."

All three persons spoke to Moneycontrol on the condition of anonymity.

An immediate response could not be elicited from Tata Sons and Tata Capital and an email query sent to both firms late on September 28 was left unanswered at the time of publishing this article.

Tata Group is targeting a post-money equity valuation of around $16.5 billion for the big-bang initial public offering (IPO) with the combined IPO size (fresh issue of shares plus offer for sale by Tata Sons and IFC or International Finance Corporation) pegged around $1.85 billion or Rs 16,400 crore, Moneycontrol had reported earlier on September 23.

Insurance giant LIC is likely to make a big bet on this issue with the anchor portion likely on September 3 and the issue gearing up to launch between September 6 and September 8, the report had added.