KuberGrow Team Tata Capital is making bold moves as it prepares for its much-anticipated IPO. The company’s board is set to meet on Tuesday to discuss raising funds through a rights issue, a key step toward its public market debut. With the RBI classifying Tata Capital as an upper-layer NBFC and setting a deadline to list by September, the financial powerhouse is gearing up to ensure a smooth transition. Tata Sons, which owns 93% of the company, is all in on the rights issue, reinforcing its confidence in Tata Capital’s future growth.
So why a rights issue over a preferential allotment? Simple—it’s a fairer deal for existing shareholders. Unlike a preferential issue, this method doesn’t require a fair value assessment, meaning all shareholders get the same price on new shares. According to Binoy Parikh from Katalyst Advisors, this approach helps keep shareholding stable while giving Tata Capital the cash it needs to sustain its 20-25% annual growth rate. With India’s financial sector getting more competitive by the day, this capital infusion is a crucial step for the company’s expansion plans.
To keep things smooth ahead of the IPO, Tata Capital has also tweaked its Memorandum and Articles of Association (MoA & AoA). One big change? Shareholders can’t renounce their rights in rights issues until after the IPO. With 29,000 shareholders on board, this rule ensures stability while still allowing them to buy more shares if they choose. It’s all part of Tata Capital’s plan to manage its ownership structure effectively before stepping into the public markets.
Post-IPO, Tata Sons’ stake might dip by 5%, but it’ll still hold at least 75% of the company—well within regulatory norms. According to Fitch Ratings, the IPO will strengthen Tata Capital’s financial position while further lowering its debt-to-equity ratio, which has already improved from 7.2x in FY22 to 6.3x in FY25. A stronger balance sheet means Tata Capital will be better equipped to compete in India’s fast-changing NBFC sector.
With the IPO just around the corner, all eyes are on Tata Capital. The rights issue will give the company a financial boost, setting the stage for what could be one of the biggest market debuts of the year. As the company steps into the public arena, investors are eager to see how it leverages its legacy, scale, and strategy to establish itself as a dominant player. Will this IPO be a game-changer for Tata Capital? The countdown has officially begun!
