Shares of Tata Motors and Tata Investment rose up to 3 percent on March 4 amid reports suggesting that the Tata Group's financial services arm--Tata Capital was eyeing a valuation of $11 billion for its upcoming public issue.
While Tata Motors owns a near 4 percent stake in Tata Capital, Tata Investment enjoys around 2 percent equity, meaning that a higher valuation for the company will bode well for the two other Tata Group companies.
Meanwhile, Tata Investment (TICL) also serves as the investment arm of the Tata Group, holding stakes in multiple Tata companies. Hence, any major developments at the group level, such as Tata Capital’s IPO, tend to boost TICL’s prospects, as it benefits indirectly from the increasing valuations of its portfolio companies.
To that effect, shares of Tata Investment rose 3 percent to trade at Rs 6,097.65 on the NSE, while those of Tata Motors were marginally up at Rs 623.45.
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Tata Group is eyeing a valuation of approximately $11 billion for its financial and investment services arm, Tata Capital, in what could be India’s largest IPO of the year, Bloomberg reported, citing sources familiar with the matter. The public offer is expected to raise up to $2 billion, though final details may evolve as discussions progress.
Tata Capital’s board of directors recently approved the IPO plans, which will include a fresh issue of 23 crore shares alongside an offer-for-sale (OFS) component, as disclosed in its regulatory filings with NSE and BSE. The financial services arm is mandated to list on stock exchanges by September 2025 under the Reserve Bank of India's “upper layer” NBFC regulations.
As of March 31, 2024, Tata Sons holds a 92.83 percent stake in Tata Capital, while the remaining shares are largely owned by other Tata Group entities, according to Crisil Ratings. Tata Sons has demonstrated strong backing for Tata Capital, infusing Rs 6,097 crore over the last five fiscal years—including Rs 2,500 crore in FY19, Rs 1,000 crore in FY20, Rs 594 crore in FY23, and Rs 2,003 crore in FY24. With key Tata Sons executives serving on Tata Capital’s Board, the group’s commitment to expanding its presence in the lending sector is evident.
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