Tata Capital Limited (TCL), a prominent player in India’s financial services sector, has announced a ₹1504 crore rights issue to strengthen its financial position ahead of its much-anticipated IPO. Market experts estimate the IPO to be priced around ₹350 per share. The company’s unlisted shares are already in high demand in the grey market, signaling strong investor confidence in its future growth.

1. Key Details of the Rights Issue

Tata Capital’s Board of Directors has approved the issuance of 5,35,20,102 equity shares at a face value of ₹10 per share, with a premium of ₹271 per share, making the issue price ₹281 per share.

• Entitlement Ratio: 1 new share for every 70 shares held as of the record date, February 25, 2025.
• Subscription Period: March 7, 2025, to March 16, 2025.
• Payment Requirement: Investors must pay the full ₹281 per share upfront.

2. Objectives of the Fundraising

Tata Capital intends to utilize the capital raised through this rights issue to:
✅ Strengthen its balance sheet and ensure compliance with RBI’s regulatory norms.
✅ Expand its lending portfolio to meet increasing demand.
✅ Invest in subsidiaries and accelerate business growth.
✅ Reduce debt burden and possibly redeem preference shares.

This strategic capital infusion will enhance Tata Capital’s ability to support retail and corporate clients while maintaining a strong financial position in the NBFC sector.

3. Key Terms of the Rights Issue

• Offer Price: ₹281 per share (₹10 face value + ₹271 premium).
• Mode of Payment: NEFT/RTGS to Tata Capital’s designated HDFC Bank account.
• Allotment Priority:
  • Shareholders subscribing to full entitlement get priority.
  • Requests for additional shares will be considered thereafter.
• Non-Renounceable: Rights cannot be transferred or traded.
• Listing & Allotment: Shares will be credited in demat accounts within 30 days post closure.

4. Rising Valuation & IPO Prospects

Tata Capital’s rapid expansion and improving financials have fueled anticipation for its IPO. Market speculations suggest an IPO price of ₹350 per share, significantly higher than the current rights issue price of ₹281.

Furthermore, Tata Capital’s unlisted shares are trading at a premium in the grey market, highlighting strong demand and positive sentiment among investors.

5. Investor Sentiment & Market Outlook

With India’s financial sector undergoing digital transformation and credit expansion, Tata Capital is well-positioned to capitalize on emerging opportunities. The company’s prudent risk management, diversified lending portfolio, and association with the Tata Group make it an attractive investment option.

Long-term investors looking to gain exposure to a high-growth NBFC should consider this rights issue as an opportunity to secure holdings before the IPO.

Conclusion

Tata Capital’s ₹1504 crore rights issue is not just a fundraising event—it’s a strategic step towards fortifying its market position. With an IPO on the horizon and grey market demand soaring, investors have a unique opportunity to be part of Tata Capital’s journey toward becoming one of India’s top financial institutions.