Share price of Tata Investment Corporation jumps on Tata Capital’s IPO approval

Market Performance

Tata Investment Corporation's share price surged 10% on Tuesday, reaching ₹6,220.75 on the National Stock Exchange (NSE). This movement followed Tata Capital's approval of an initial public offering (IPO).

Over the past five years, Tata Investment Corporation Limited (TICL) has seen its stock value increase by 588.12%. However, in the short term, the stock has registered a 12% decline over the past year while gaining over 2% in the last six months.

Tata Capital's IPO Plans

Tata Capital, a non-banking financial services (NBFC) firm under Tata Sons, has announced plans for an IPO. Tata Capital’s 2% stake is held by Tata Investments Corporation while Tata Sons, its parent company, holds approx 93% of the NBFC.

The IPO will include a fresh issuance of shares with a face value of ₹10 each, amounting to ₹23 crore. An Offer for Sale (OFS) will also be included, allowing eligible shareholders to sell their holdings. Details regarding the selling shareholders and the size of the OFS have not yet been disclosed.

According to Tata Capital's official filing, the IPO's final structure will depend on market conditions, regulatory approvals, and other necessary factors.

Rights Issue Approval

In addition to the IPO announcement, Tata Capital's board has approved a rights issue worth ₹1,504 crore for existing shareholders. The record date for this rights issue has been set for February 25, 2025. However, the company has not announced the rights issue price or the entitlement ratio for existing shareholders.

Upcoming Market Debut

Upon successful completion of the IPO, Tata Capital will be the first Tata Group company to be listed on the stock market in over 15 months. The last Tata Group entity to go public was Tata Technologies in November 2023. Before that, Tata Consultancy Services (TCS) had been the group's most recent significant IPO nearly two decades earlier.

Regulatory Compliance and Classification

The Reserve Bank of India has classified Tata Capital as an upper-layer Non-Banking Financial Company (NBFC) for 2024-2025. According to RBI regulations, the company must list its shares on the stock exchange by September 2025 to remain compliant.

Summary

Tata Investment Corporation's share price significantly rose following Tata Capital's decision to proceed with an IPO. The IPO will include fresh issues and an Offer for Sale, though details about the selling shareholders remain undisclosed. Tata Capital's rights issue worth ₹1,504 crore has also been approved. Regulatory requirements set by RBI mandate the company's listing by September 2025. This IPO marks an essential step for Tata Group as it prepares for its first public listing in over a year.