Tata Capital, a leading financial services arm of the Tata Group, is poised to file draft IPO papers with SEBI to raise over Rs 17,000 crore, but only after securing final approval from the National Company Law Tribunal (NCLT) for its merger with Tata Motors Finance. Sources indicate the NCLT’s nod, expected by the end of FY25, will pave the way for an IPO that could value the company at Rs 85,000 crore —one of the largest financial sector listings in India.

The IPO, comprising a fresh issue of 2.3 crore equity shares and an offer for sale by existing shareholders, aligns with RBI’s mandate for upper-layer NBFCs to list within three years of designation. Tata Capital, classified as such in September 2022, must comply by September 2025. The firm has also planned a rights issue to strengthen its finances pre-IPO. Tata Sons, holding a 92.83% stake, stands to benefit significantly from this move, following Tata Technologies’ successful 2023 listing.

The merger, approved by the boards of Tata Capital, Tata Motors Finance, and Tata Motors in June 2024, received CCI clearance in September. Tata Motors’ Group CFO PB Balaji, during a Q3 earnings call, noted that creditor meetings are complete, with NCLT’s final order imminent. Post-merger, Tata Capital will issue shares to Tata Motors Finance shareholders, giving Tata Motors a 4.7% stake in the unified entity.

Advised by Cyril Amarchand Mangaldas and Kotak Mahindra Capital, Tata Capital’s IPO filing hinges on this merger, which aims to consolidate its position in vehicle financing. If successful, this listing will mark a pivotal moment for the Tata Group, reinforcing its financial services dominance amid a competitive NBFC landscape.