Tata Capital, the financial services arm of the Tata Group, has successfully raised ₹1,500 crore through a rights issue, with significant participation from its parent company, Tata Sons, and the International Finance Corporation (IFC). Tata Sons, holding a commanding 93% stake in Tata Capital, led the subscription alongside IFC and other minority shareholders. This capital infusion comes as the company gears up for its much-anticipated initial public offering (IPO), expected to exceed ₹15,000 crore, with plans to file draft papers post-merger approval from the National Company Law Tribunal (NCLT) for its integration with Tata Motors Finance.

The rights issue, approved earlier by Tata Capital’s board, follows a series of strategic financial moves, including a ₹1,504 crore rights issue in February and plans to raise ₹15,000 crore through debt instruments like green bonds and non-convertible debentures. The fresh funds are aimed at strengthening the company’s financial position ahead of its IPO, mandated by the Reserve Bank of India (RBI) for "upper layer" non-banking financial companies (NBFCs) to list by September 2025. As of March 31, 2024, Tata Capital boasted an impressive assets under management (AUM) of ₹158,479 crore, underscoring its pivotal role within the Tata ecosystem and the broader financial services landscape.

This latest development highlights Tata Capital’s proactive approach to meeting regulatory requirements while bolstering its capital base for future growth. The involvement of IFC, a member of the World Bank Group, signals strong institutional confidence in Tata Capital’s trajectory, particularly as it prepares for a public listing that could value the company at upwards of $11 billion. With Tata Sons maintaining a dominant stake and no plans to dilute below 75% post-IPO, according to Fitch Ratings, the financial services firm is poised to make a significant mark on India’s stock market, potentially becoming the 17th Tata Group entity to trade publicly.