Tata Capital IPO: Tata Investment Corporation stock rally after IPO approval

Shares of Tata Investment Corporation surged by 8.3% on Wednesday, reaching a peak of Rs 6,225 on the Bombay Stock Exchange (BSE). The rally was sparked by reports that Tata Capital, a financial services arm of the Tata Group, had received board approval for its long-awaited initial public offering (IPO).

According to the Reuters report, Tata Capital will issue 23 crore new shares as part of the IPO, while some existing shareholders are expected to reduce their stakes through an offer-for-sale (OFS) mechanism.

Tata Capital IPO Date
Tata Capital is expected to launch its initial public offering (IPO) by September 2025, according to ET Now report. According to reports, the share price of Tata Capital in the unlisted market has seen a significant rise, increasing from Rs 450 in December 2023 to Rs 1,100 in April 2024. The current price in the unlisted market is around Rs 900. Based on the outstanding number of shares, which is expected to be 3.74 billion by the end of FY24, Tata Capital’s valuation is estimated to be Rs 3.5 lakh crore.

Tata Investment, a holding company with stakes in various Tata Group companies, is expected to benefit from the IPO, as market observers believe it could unlock value for Tata Group’s broader financial services portfolio. This IPO marks Tata Group's second public debut in recent months, following the successful listing of Tata Technologies in November 2023.

Tata Sons, the holding company of the group, currently owns a 93% stake in Tata Capital. The financial services arm plays a vital role in supporting the funding needs of various Tata Group entities, operating across a range of sectors, including personal loans, investment banking, and advisory services via its subsidiaries such as Tata Capital Financial Services and Tata Capital Housing Finance.

In September 2022, the Reserve Bank of India classified Tata Capital Financial Services as an upper-layer systemically important non-banking financial company (NBFC), requiring stricter compliance and a public listing within three years.

Tata Investment shares have dropped 8.71% over the past year but gained 0.88% in the last six months. The stock has seen a significant rally, rising by 19.04% in the past week and 1.63% in the last month.
Stock overview
Tata Investment Corporation share closed at INR 6,158.15, marking a gain of 7.00% on Wednesday. With a market capitalization of Rs 31,200 crore, the company currently has a Price-to-Earnings ratio of 93.03. Tata Investment Corporation also offers a dividend yield of 0.45%. The stock’s 52-week high and low has been Rs 9,756.85 and Rs 5,145.15 respectively.

Shareholding pattern As of the December 2024 quarter, Tata Investment Corporation's shareholding pattern reveals that the promoters continue to hold a dominant 73.38% stake, unchanged from previous quarters. Foreign Institutional Investors (FIIs) hold 2.24% of the shares. Domestic Institutional Investors (DIIs) have a modest holding of 0.49%. The government's stake remains steady at 0.49%. Public shareholders account for 23.4% of the company’s equity, slightly down from previous quarters.