Mumbai: Tata Capital, the financial services arm of the Tata group, is likely to come out with a private equity fund shortly.
This was announced by Tata Capital managing director Praveen P. Kadle on Tuesday. Kadle declined to say what could be the size of the private equity fund, but according to early indications, the fund-size will initially be of $350-400 million.
Tata Capital has an Rs8,500 crore alliance with the Japanese Mizuho Financial Group. Kadle said the alliance with Mizuho provided the right platform for Indian corporates to tap the Japanese market.
He said Japan offered tremendous opportunities for Indian companies to raise capital through equity as well as debt.
Yukata Endo, deputy president of Mizuho, said Japanese corporations and retail investors saw India as a major investment destination.
“The Japanese retail investment has touched $1 billion and they are mostly through mutual funds,” Endo said, adding the time is ripe for Japanese investors to invest in India, cashing in on the opportunities the market offers.
He said the Japanese were looking at India for big investments now as they felt the country along with China are poised for sustained high-growth.
Asked if Mizuho was looking at an equity stake in Tata Capital, Endo said, “We have not discussed this.”
Tata Capital completes two years of its existence in September. Its businesses are mainly in retail, corporate, construction and infra financing and securities business.
Kadle said Tata Capital had been growing rapidly and in the first four months of this current fiscal had recorded a growth of 12% which indicated it could touch the Rs10,000 crore mark by end-this fiscal.
Corporate financing accounted for nearly Rs5,000 crore, including part-funding of Tata Motors’ acquisition of Jaguar and Land Rover.
Kadle said consumer finance accounted for Rs2,000 crore and the company planned to expand its auto financing and real estate loans in a big way.
Home loans now accounted for Rs400-500 crore, he said, adding in mortgage financing, the company was looking at Tier II and III cities.
The company is now in the process of tying-up with some of the top auto companies for passenger car financing.