Tata Sons-backed Tata Capital files draft papers with Sebi for $2 bn IPO

New Delhi: Non-banking financial company Tata Capital has filed updated draft papers for a mega initial public offering (IPO), with people familiar with the matter pegging the issue size at an estimated $2 billion (Rs 17,200 crore).

This would value the company around $11 billion, they added. According to the updated draft red herring prospectus (DRHP) filed on Monday, the proposed IPO of 47.58 crore shares comprises a fresh issue of 21 crore equity shares and an offer for sale (OFS) of 26.58 crore shares.

Under the OFS component, Tata Sons will offload 23 crore shares, while the International Finance Corporation (IFC) will divest 3.58 crore shares.

Currently, Tata Sons holds an 88.6 per cent stake in Tata Capital, while IFC owns 1.8 per cent holding.

Proceeds from the IPO will be used to strengthen the company’s Tier-1 capital base, supporting future capital requirements, including onward lending.

Tata Capital, the financial services arm of the Tata Group, had earlier filed draft papers in April through the confidential pre-filing route and secured approval from market regulator Sebi in July.

As part of the process, companies are required to file an updated DRHP before submitting the final red herring prospectus (RHP).

If successful, this IPO will become the largest public issue in India’s financial sector.