Tata Capital board clears ₹1,752 cr rights issue ahead of IPO plan

The board of Tata Capital Ltd (TCL), a financial services firm under the Tata group, has approved a rights issue worth ₹1,752 crore in anticipation of its upcoming initial public offering (IPO), which is expected to take place by September, according to a stock exchange filing from the company on Thursday.

Tata Sons Ltd, the holding company of the Tata group, is expected to subscribe to ₹1,630 crore of this rights issue, as per sources familiar with the matter. This capital infusion is in preparation for Tata Capital's $2 billion IPO, which is anticipated to be one of the largest listings in the Indian financial sector this year.

During the same board meeting, a proposal was also approved to raise up to ₹30,000 crore through various debt instruments, including secured, unsecured, subordinated, perpetual, or market-linked redeemable non-convertible debentures, as well as green bonds. The debt will be issued in one or more tranches on a private placement basis, and the company indicated that the proceeds from this issuance will be utilized for on-lending purposes.

Tata Sons, which holds a 93 percent stake in Tata Capital, had previously subscribed to the company's last rights issue in March, contributing ₹1,400 crore out of a total of ₹1,504 crore raised during that round. The remaining stake in Tata Capital is held by Tata Investment Corporation Ltd, the TCL Employee Welfare Trust, and other minority investors.
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