Tata Capital IPO Date, Price, Size, ROE, Dividend Policy and How to apply

Here is a detailed blog-style analysis of the Tata Capital IPO for 2025, covering all key aspects such as the background, financials, IPO details, regulatory context, business model, valuation, risks, and market positioning to meet your requirement:

Tata Capital IPO 2025: A Comprehensive Guide to This Landmark Listing

Introduction

Tata Capital, the financial services arm of the storied Tata Group, is set to hit the stock markets with an eagerly awaited Initial Public Offering (IPO) in September 2025. This IPO is significant for several reasons: it marks the Tata Group’s second major public listing in the last two years, it is a regulatory imperative under RBI’s new financial norms, and it offers investors a chance to participate in the growth of one of India’s largest Non-Banking Financial Companies (NBFCs).

Background and Regulatory Context

Tata Capital operates in the NBFC sector, offering a broad suite of financial services including retail and SME lending, corporate finance, wealth management, and sustainable finance solutions. In September 2022, the Reserve Bank of India (RBI) classified Tata Capital as an “Upper Layer” NBFC under its Scale-Based Regulation (SBR) framework. This new regulatory categorization imposes stricter governance and capital requirements and mandates that upper-layer NBFCs must be publicly listed within three years of classification. September 2025 serves as the deadline for Tata Capital to comply, which is a driving force behind the timing of this IPO.

Business Model and Services

Tata Capital functions as an NBFC-Investment and Credit Company (NBFC-ICC), with diverse business operations:

Retail and SME Lending: Including housing loans, auto loans, personal loans, and business loans.
Commercial and Corporate Finance: Structured lending and corporate loans.
Wealth and Investment Banking: Through its subsidiary Tata Securities.
Private Equity and Alternative Investments
Sustainable Finance: Clean energy and infrastructure lending, primarily facilitated via Tata Cleantech Capital.

The company is supported by Tata Sons Private Limited, which currently holds roughly 93% ownership, providing significant brand credibility and financial backing.

Financial Snapshot

Tata Capital boasts impressive financial metrics that underline its growth trajectory and lending capacity:

Total Assets: ₹1.77 lakh crore (as of March 31, 2024)
Loan Book: ₹1.57 trillion, making it the 7th largest NBFC lender in India
Revenue Growth: 56% increase to ₹28,370 crore in FY25 from ₹18,198 crore in FY24
Net Profit (PAT): ₹3,655 crore in FY25, reflecting strong profitability
Gross NPA: 2.33% and Net NPA: 0.98%, indicating good asset quality
ROE: 10.63% and EPS of ₹9.72 for FY25
Credit Ratings: AAA rating from major agencies like CRISIL, ICRA, and CARE

Interest income from loans forms the bulk (₹25,720 crore) of Tata Capital’s revenue, supplemented by fee-based income and advisory services.

IPO Details

The Tata Capital IPO is structured as a book-building issue with both a fresh issue and an offer-for-sale (OFS) segment:

Size: Approximately ₹2,000 crore
Shares Offered: Around 47.58 crore shares (21 crore fresh issue + 26.58 crore OFS)
Expected Price Band: Around ₹400 per share (estimates based on valuations and market factors)
Lot Size: To be announced but expected to be consistent with market norms for large IPOs
Listing: Shares to be listed on BSE and NSE
Lead Managers: Kotak Mahindra Capital, Axis Capital, BNP Paribas, Citigroup India, and HDFC Bank

The proceeds from the IPO will primarily be used to bolster Tata Capital’s lending operations, especially in tier 1 and tier 2 cities, enhance capital adequacy for growth, and support expansion in infrastructure and clean energy financing.

Market Sentiment and Valuation

The demand for Tata Capital’s unlisted shares surged ahead of the IPO announcement, with prices reaching upwards of ₹1,000 per share in early 2025. However, experts anticipate a correction post-listing due to the expected IPO price band being set around ₹400 per share, reflecting a more realistic valuation.

The IPO valuation corresponds to a price-to-earnings (P/E) ratio of around 41x, which appears reasonable compared to the high multiples seen in unlisted share trading (P/E ~104x at ₹945). While the valuation multiples are higher than some peers such as Bajaj Finance and L&T Finance, the investment is positioned as a play on Tata Capital’s growth potential, strong credit profile, and the Tata brand premium.

Competitive Landscape and Risks

Tata Capital operates in a highly competitive NBFC environment, facing rivals like Bajaj Finance, L&T Finance, and HDFC Ltd. The industry is marked by moderate barriers to entry due to regulatory and capital requirements, but intense competition for retail and corporate loans persists.

Risks for investors include:

Valuation risk due to high market expectations and premium pricing
Potential markdown of unlisted shares post-IPO listing
Interest rate fluctuations impacting loan demand and cost of funds
Regulatory risks tied to compliance with RBI norms for NBFCs

Strategic Importance and Growth Potential

Listing enables Tata Capital to sustain its robust growth plans by improving capital adequacy to expand lending capacity. The RBI’s regulatory push reinforces investor confidence as the company aligns with compliance and transparency norms.

The company’s focus on tier 2/3 cities and sectors like clean energy and infrastructure finance aligns well with India’s broader economic development goals, providing long-term growth visibility.

DIVIDEND POLICY

The declaration and payment of dividends on our Equity Shares, if any, will be recommended by our Board to the Shareholders for their approval, at their discretion, subject to compliance with the provisions of the Articles of Association and the Companies Act, including the rules made thereunder and other relevant regulations, including the NBFC Scale Based Regulations, each as amended. Further, our Board shall also have the absolute power to declare interim dividend in compliance with the Companies Act. The dividend distribution policy of our Company was approved and adopted by our Board on December 13, 2023 (“Dividend Policy”).

In terms of the Dividend Policy, the declaration and payment of dividend will depend on a number of internal and external factors. Some of the internal factors on the basis of which our Company may declare dividend shall, inter alia, include financial performance of our Company, shareholder expectations, long term growth plans of our Company and capital requirements, auditors’ report to the financial statements including the qualifications, regulatory compliances, as may be applicable from time to time, net worth, net owned funds, and such accumulated reserves, profits of the current period, profitability outlook for the year, return on assets and return on equity, asset quality, compliance with terms and covenants in any agreement entered into by our Company with its lenders/debenture trustees and any other relevant or material factor as may be deemed fit by our Board.

Pursuant to the notification dated June 24, 2021 issued by the RBI, the declaration of dividend of our Company shall, among other things, be dependent on supervisory findings of RBI on divergence in classification and provisioning for non-performing assets, along with capital adequacy requirements and maximum dividend payout ratio prescribed under applicable laws. Some of the external factors on the basis of which our Company may declare dividend shall inter alia include any significant changes in macro-economic conditions, competitive landscape, taxation provisions, government policies and any other relevant or material factor(s) as may be deemed fit by our Board. There is no guarantee that any dividends will be declared or paid in the future. For details in relation to risks involved in this regard, see “Risk Factors – Our ability to pay dividends in the future will depend on our earnings, financial condition, capital expenditures and restrictive covenants of our financing arrangements” on page 78. Details of dividends distributed on the Equity Shares are as follows: Particulars	From April 1, 2025 up till the date of this Updated Draft Red Herring Prospectus – I	Financial Year ended March 31, 2025		Financial Year ended March 31, 2024	Financial Year ended March 31, 2023
Number of Equity Shares bearing face value of ₹10(1)	4,034,869,037	3,799,927,250		3,746,407,148	3,560,119,841
Face value of Equity Shares (in ₹)	10	10		10	10
Interim Dividend (₹ in million)	Nil	Nil		Nil	Nil
Final Dividend (₹ in million)(2)	1,673.2	786.8		747.6	562.6
Total Dividend (₹ in million)(2)	1,673.2	786.8		747.6	562.6
Dividend per share (in ₹)	0.4	0.2		0.2	0.2
Dividend Rate	4.2%	2.1%		2.1%	1.6%
Mode of payment of dividend			Electronic modes and demand drafts
Tax Deducted at Source (₹ in million)	163.7	77.0		74.7	56.2
Unclaimed dividend (₹ in million)	NA	0.0^		0.0^	0.0^
^ Amount of unclaimed dividend is less than ₹ 50,000. (1) Number of equity shares is the total number of shares as per the Restated Consolidated Financial Information and includes the shares held by the TCL Employee Welfare Trust. (2) The total dividend declared and paid includes the dividend paid on the number of shares held by the TCL Employee Welfare Trust as on the record date.