In October 2025, Tata Capital, the flagship financial services arm of the Tata Group, entered the public markets with one of the largest initial public offerings (IPOs) in Indian history. Established in 2007, Tata Capital has grown into the country’s third-largest diversified Non-Banking Financial Company (NBFC) with a wide-ranging portfolio catering to individuals, businesses, and institutions. Its IPO marks not just a turning point for the company but also underscores the Tata Group’s broader ambition in financial services.
Tata Capital’s Role in the Tata Group
Tata Capital was conceived as the financial arm of the 155-year-old Tata conglomerate, offering services under the ethos of trust and customer-centricity associated with the Tata brand. As a wholly owned subsidiary of Tata Sons, it has extended its footprint across retail lending, corporate finance, wealth management, and specialized financial services.
Close synergies with other Tata businesses, such as financing for Tata Motors vehicles and providing co-branded financial products, have strengthened its reach. More importantly, its mandate reflects the Tata legacy: delivering accessible, affordable financial solutions to diverse customer segments while supporting inclusive growth.
A Diversified Portfolio of Financial Services
Tata Capital has positioned itself as a “one-stop financial solutions partner,” offering a comprehensive range of services:
- Retail Lending: Personal loans, home finance, consumer durable loans, education loans, and co-branded credit cards serve individuals and households.
- Business and SME Finance: Small business loans, commercial vehicle financing, and leasing solutions anchor its corporate portfolio, further strengthened by the merger with Tata Motors Finance in 2024.
- Wealth Management: Tata Capital Wealth, launched in 2019, manages around ₹7,000 crore of assets, catering to high-net-worth and retail investors with advisory and distribution services.
- Private Equity and Institutional Services: Operating multiple private equity and venture funds with assets of about ₹7,000 crore, the company invests in sectors like healthcare and growth capital.
- Specialized Finance: Through Tata Cleantech Capital and other divisions, Tata Capital finances renewable energy, infrastructure, and sustainable development projects.
This breadth provides cross-selling opportunities, reduces risk concentration, and creates a competitive advantage against NBFCs focused on narrower market segments.
Growth Journey and Financial Performance
Tata Capital has witnessed substantial growth over the past decade, bolstered by India’s rising demand for credit and financial services. Its consolidated loan book reached approximately ₹2.3 trillion by June 2025, securing its position among the top three NBFCs. The lending mix is balanced, with around 61% retail loans, 26% SME loans, and the remainder in corporate lending.
Financial performance highlights include:
- Interest income rising from ₹11,911 crore in FY23 to nearly ₹25,720 crore in FY25.
- Net profit growth from ₹2,946 crore in FY23 to ₹3,655 crore in FY25.
- June 2025 quarter profits surpassing ₹1,000 crore, double the previous year’s performance.
Crucially, Tata Capital has maintained non-performing assets (NPAs) at around 1.5–2%, demonstrating prudent risk management. Backed by capital infusions worth over ₹6,100 crore from Tata Sons and a strong credit rating, the company has been able to consistently access funds at competitive costs.
Strategic Transition: From Core Investment to Operating NBFC
Until recently, Tata Capital operated primarily as a Core Investment Company (CIC), serving mainly as a holding entity. Beginning in 2023, ahead of RBI’s mandate for “upper layer” NBFCs to list, the company consolidated its subsidiaries such as Tata Capital Financial Services and Tata Cleantech Capital into the parent structure.
The critical milestone came in August 2024 when RBI approved Tata Capital’s conversion into an Investment and Credit Company (NBFC-ICC). This transition enabled Tata Capital to become a direct operating lender, streamlining its balance sheet and preparing for its eventual public listing. The inclusion of Tata Motors Finance strengthened its retail and SME lending base, while introducing Tata Motors as a minority partner.
The October 2025 IPO: Scale and Significance
The Tata Capital IPO, open from October 6–8, 2025, is both record-breaking and strategically significant:
- Issue Size: ₹15,512 crore – India’s largest IPO of 2025 and the largest-ever NBFC public listing.
- Valuation: Approximately ₹1.38 trillion, placing it among the top five NBFCs nationwide.
- Pricing: ₹310–326 per share, valuing the company at about 3.2 times its expected FY2026 book value. Experts note the conservative pricing as an anchor for potential listing gains.
- Structure: Fresh share issue of ₹6,846 crore to strengthen core capital, and offer-for-sale by Tata Sons and International Finance Corporation, collectively divesting around 11% equity.
Following the issue, Tata Sons will retain about 77% ownership, preserving its controlling stake. This IPO, significantly larger than Tata Technologies’ 2023 offering, represents a milestone for the Tata Group which had not listed major subsidiaries for nearly two decades.
Investor Response and Market Reception
Investor enthusiasm has been strong. The anchor book witnessed allocations to global institutional investors like Morgan Stanley, Goldman Sachs, and Nomura, alongside India’s leading mutual funds. The appeal stems from:
- Tata Capital’s diversified business model.
- Strong financial performance with improving profitability.
- Association with the Tata brand, noted for governance and trust.
- Underpricing relative to private-market valuations, leaving “value on the table” for new investors.
Retail investors have also been attracted by the opportunity to own shares in a Tata financial services company that directly interacts with consumers, unlike Tata’s IT or heavy-industrial offerings.
Tata Capital and India’s NBFC Growth Story
The IPO must also be understood within the context of India’s fast-growing NBFC sector. NBFCs have expanded their share of the credit market, now accounting for around 21% of total lending and 26% of GDP by FY25, up from 16% in FY19. They serve sectors traditionally under-penetrated by banks, such as rural borrowers, MSMEs, and first-time credit seekers.
Tata Capital, as one of India’s largest diversified NBFCs, has leveraged this boom through:
- Digital-first processes and consumer-focused innovation.
- Strong corporate sponsorship enabling low borrowing costs.
- Resilience during sector-wide stress, such as the 2018–19 liquidity crisis.
Being identified as an “upper layer” NBFC by the RBI also positions Tata Capital for stricter oversight, which enhances credibility and investor confidence.
The Tata Group’s Broader Financial Ambitions
Tata Capital is the centerpiece of the Tata Group’s financial services drive, but it is complemented by Tata AIA Life, Tata AIG General Insurance, and Tata Asset Management. Together, these entities form a comprehensive suite for consumer and institutional financial solutions.
Strategically, listing Tata Capital serves multiple purposes:
- Unlocks shareholder value, with Tata Sons expected to realize significant capital inflows.
- Strengthens Tata Capital’s autonomy and market discipline.
- Positions the group for alignment with its digital consumer ecosystem, especially through platforms like Tata Neu super-app.
This expansion dovetails with the broader vision of Chairman N. Chandrasekaran to transform the Tata Group into a more consumer-focused, digitally enabled conglomerate.
Tata Capital’s IPO is not merely a fundraising exercise—it marks a transformative milestone for both the company and the Tata Group. For Tata Capital, it represents a transition from a holding structure to a formidable, publicly accountable operating NBFC with diversified financial services. For the Tata Group, the listing reinforces its growing emphasis on finance as a strategic pillar for the future alongside technology, energy, and manufacturing.
Investors now have an opportunity to share in the evolution of one of India’s most trusted conglomerates in an industry that continues to drive financial inclusion and economic growth. Tata Capital’s IPO thus symbolizes both a historic financial moment and a forward-looking strategy for the next chapter in the Tata legacy.
