Tata Motors shares surge nearly 3% following reports of Tata Capital IPO development

Shares of Tata Motors rose by 2.81% to ₹516.40 as of 11:12 AM after reports surfaced that the Tata Group has initiated steps for the IPO of its flagship financial services arm, Tata Capital. The IPO is being planned to comply with the Reserve Bank of India (RBI)’s regulations for “upper layer” non-banking financial companies (NBFCs), according to Moneycontrol.

Key Highlights of the Proposed Tata Capital IPO:

• IPO Size: Expected to exceed ₹15,000 crore.
• Purpose: Compliance with RBI’s mandate to list “upper layer” NBFCs by September 2025.
• Advisors: Cyril Amarchand Mangaldas and Kotak Mahindra Capital have been engaged.
• Structure: Likely to include both primary and secondary share offerings.

Tata Capital Financial Overview:

• AUM Growth: Assets Under Management (AUM) stood at ₹1,58,479 crore as of March 31, 2024, up from ₹1,19,950 crore the previous year.
• Parent Support: Tata Sons infused ₹6,097 crore over five years, including ₹2,003 crore in FY24, showcasing a strategic focus on growth.

Recent Market Context:

The move follows the successful listing of Bajaj Housing Finance, which debuted with a 135% premium in September 2024. The IPO aligns with Tata Group’s focus on regulatory compliance and growth in financial services.

This announcement highlights Tata Group’s strategic intent to solidify its presence in the NBFC space, while also showcasing its ability to navigate complex regulatory landscapes effectively.