Tata Capital IPO: From business overview, financials to key risks— 10 key things to know from RHP

Tata Capital IPO: The initial public offering (IPO) of Tata Capital will open for public subscription on Monday, October 6. The ₹15,512-crore issue, comprising a fresh issue of 21 crore shares and an offer for sale (OFS) of nearly 26.6 crore shares, is the largest IPO of calendar year 2025. It is also the biggest ever from the Tata Group, and the largest by any non-banking financial company (NBFC) in India.

The Tata Capital IPO price band has been fixed at ₹310 to ₹326 per equity share of a face value of ₹10.

The mainboard issue will close on Wednesday, October 8. Share allotment is expected to be finalised on Thursday, October 9, and successful bidders can expect the shares credited to their demat accounts on Friday, October 10. Tata Capital shares will list on the BSE and the NSE on Monday, October 13.

Tata Capital IPO: 10 key things to know from RHP

Let's take a look at 10 key things to know from the Red Herring Prospectus (RHP) of the Tata Capital IPO:

1. Promoter selling shareholder

In the OFS, Tata Sons Private Limited is offering up to 23 crore shares, and International Finance Corporation is offloading 3.58 crore shares of face value of ₹10 each.

2. Tata Capital's promoters and promoter groups

The promoter of Tata Capital is Tata Sons Private Limited. As per the RHP, the company's promoter holds 3,575,064,262 shares of face value of ₹10 each, representing 88.6 per cent of the issued, subscribed and paid-up share capital of the company, on a fully diluted basis.

3. Tata Capital's management

Tata Capital's board comprises eight directors, including one executive director, seven non-executive directors, of whom five are independent directors, including two women independent directors.

Saurabh Agrawal, 56, is the chairman and non-executive director, while Rajiv Sabharwal, 59, is the Managing Director and CEO of the company.

4. Tata Capital's business

Tata Capital is the flagship financial services company of the Tata group and a subsidiary of Tata Sons Private Limited, the holding company of the Tata group and the promoter of the company. According to the CRISIL Report, it is the third-largest diversified NBFC in India.

5. Tata Capital's financial performance

Tata Capital's profit and interest income have seen a sustained rise over the last few years.

As per the RHP, its interest income in FY23 was ₹11,910.90 crore, which rose to ₹16,366.47 crore in FY24 and to ₹25,719.77 crore in FY25. In Q1FY26, the company's interest income stood at ₹6,931.83 crore compared to ₹5,995.16 crore year-on-year.

The company's profit in FY23 was ₹2,945.77 crore, which increased to ₹3,326.96 crore in FY24 and to ₹3,655 crore in FY25. In Q1FY26, the company's profit was ₹1,040.93 crore compared to ₹472.21 crore year-on-year.

6. Tata Capital IPO objects

As per the RHP, the company will use the net proceeds of the issue to augment its Tier–I capital base and meet its future capital requirements, including onward lending.

Some of the proceeds from the fresh issue will be used towards meeting offer expenses.

7. Tata Capital's peers

Some of the major listed peers of Tata Capital are: Bajaj Finance, Shriram Finance, Cholamandalam Investment and Finance Company, L&T Finance, Sundaram Finance, and HDB Financial Services.

8. Risk of customer default

The company states that it is subject to customer default risks, including delays or defaults in repayment of principal or interest on loans.

"Our gross stage 3 loans comprised 2.1 per cent, 1.7 per cent, 1.9 per cent, 1.5 per cent, and 1.7 per cent of its total gross loans as at June 30, 2025, June 30, 2024, March 31, 2025, March 31, 2024 and March 31, 2023, respectively. Non-payment or default by our customers may adversely affect our business, results of operations, cash flows and financial condition," the RHP reads.

9. Unsecured loans pose a higher credit risk

The company offers unsecured loans to its retail, SME and corporate customers.

According to the IPO's RHP, Tata Capital's unsecured gross Loans comprised 20 per cent, 22.4 per cent, 21 per cent, 24.5 per cent, and 23.1 per cent of its total gross loans as at June 30, 2025, June 30, 2024, March 31, 2025, March 31, 2024 and March 31, 2023, respectively.

"Unsecured loans pose a higher credit risk compared to our secured loan portfolio because they are not supported by realisable collateral that could help ensure an adequate source of repayment for the loan," the company's RHP reads.

10. Rate-sensitive business

Volatility in interest rates can affect the company's lending and treasury operations.

"Changes in interest rates can significantly affect our earnings and associated key financial metrics, including net interest income (NII), net interest margin (NIM) ratio, cost-to-income ratio, return on assets (RoA), and return on equity (RoE), among others," says the RHP.

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