Tata Cap board to look at potential fund-raise

The board of Tata Capital, which is preparing for an initial public offering (IPO), will meet on Tuesday to discuss a potential fundraising effort through a rights issue. The Reserve Bank of India (RBI) has classified Tata Capital as an upper-layer non-banking financial services company (NBFC) and has directed the firm to list its shares by September. Tata Sons, which holds approximately 93% ownership in Tata Capital, is expected to participate in the rights issue to maintain its current shareholding in the NBFC.

Tata Capital requires consistent capital infusion to support its 20-25% growth rate. The rights issue aims to fulfill this requirement, according to a person familiar with the matter. The remaining 7% ownership in Tata Capital is distributed among various Tata Group entities, select executives from both Tata Group and external organizations and the Washington-based International Finance Corporation.​