Tata Capital, a significant subsidiary of Tata Sons, has transitioned from an NBFC – Core Investment Company (CIC) to an NBFC – Investment Credit Company (ICC) following the Reserve Bank of India's (RBI) approval. This change is part of a larger restructuring effort, which included the merger of Tata Cleantech Capital and Tata Capital Financial Services.

In a recent stock exchange filing, Tata Capital confirmed the successful transition, stating that it had received the RBI's Certificate of Registration as an NBFC-ICC. This follows the surrender and cancellation of the registration certificates of the merged entities, TCFSL and TCCL. The restructuring consolidates Tata Capital's financial services under one umbrella.

Another significant milestone for Tata Capital is the merger with Tata Motor Finance Ltd (TMFL), a subsidiary of Tata Motors Finance Holdings, announced in June 2024. The merger is expected to take 9-12 months to complete, with Tata Motors set to hold a 4.7% stake in Tata Capital through TMF Holdings.

The RBI's tighter regulations, introduced after the IL&FS crisis in 2018, classify NBFCs into four tiers, with Tata Sons and Tata Capital both falling under the Upper Layer (NBFC-UL). This classification mandates that they list their shares by September 2025. However, Tata Capital may seek an extension due to the ongoing merger with TMFL.

Despite potential delays, Tata Capital's market capitalization has surged from $33 billion to $48 billion in the past six months, reflecting strong investor confidence as the company prepares for a potential IPO. This transformation marks a pivotal step for Tata Capital as it strengthens its position in the financial sector.