Tata Capital Eyes $20 Billion Valuation Ahead of Mega IPO Filing

Tata Capital is set to significantly raise its IPO valuation, with the company now aiming for a post-listing market capitalisation of between $18 billion and $ 20 billion, according to people familiar with the matter. The planned listing, expected to take place by September 2025, positions the financial services arm of the Tata Group among the most valuable NBFCs in the country.

Revised Draft Filing in the Works

Following SEBI’s approval of a confidential Draft Red Herring Prospectus (DRHP) earlier this year, Tata Capital is preparing to file an updated version in the coming days. The revised document will reflect changes in valuation estimates and details of the issues. The company is reportedly on track to meet the Reserve Bank of India’s mandate, which requires upper-layer NBFCs to list on Indian stock exchanges by September next year.

The updated DRHP is expected to be filed publicly by the end of July, with the IPO likely to launch shortly thereafter.

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Financials Underpin Valuation Shift

Tata Capital’s FY25 performance lends support to the upward revision. The company reported a 56% year-on-year increase in revenue, which stood at ₹28,313 crore. Profit after tax came in at ₹3,655 crore, reflecting a near 10% annual growth. The company’s loan book crossed ₹1 lakh crore during the same period, indicating a robust expansion in its lending operations.

Additionally, unlisted shares of Tata Capital have appreciated by over 13% in recent months. This uptick, observed in the grey market, is being interpreted as early investor optimism surrounding the offering.

Offer for Sale Likely to Dominate Issue Structure

Sources indicate that the IPO will primarily consist of an offer-for-sale (OFS) by existing shareholders. Tata Sons, the holding company, is expected to sell around 23 crore shares. The International Finance Corporation (IFC), an early investor in the company, is also anticipated to offload approximately 3.6 crore shares.

The IPO is unlikely to include a significant fresh issue component, meaning the proceeds will be allocated to existing shareholders rather than being reinvested in the business.

Regulatory Compliance and Market Context

Tata Capital’s IPO plans are part of a broader regulatory compliance framework. In October 2022, the RBI mandated that all NBFCs categorised under the upper-layer classification must list within three years. The company’s IPO timeline remains consistent with this directive.

The listing is also expected to coincide with a broader uptick in primary market activity. Several large-cap offerings are lined up for the second half of 2025, and Tata Capital’s issue could serve as a bellwether for investor sentiment in the financial services sector.

Should the IPO proceed as expected, Tata Capital is likely to emerge as the fourth most valuable NBFC on Indian exchanges, following Bajaj Finance, Bajaj Finserv, and Jio Financial Services.

Future Outlook

Market participants believe the revised valuation reflects not only strong operational growth but also the strategic significance of Tata Capital within the broader Tata Group portfolio. The financial services segment has been a key area of focus for the conglomerate, and the IPO is likely to attract both domestic and international institutional interest. The final terms of the offering—including the price band, total issue size, and investor quotas—will be disclosed in the Red Herring Prospectus, which is expected to be released soon.