Tata Sons Looks To List Tata Capital By Next Year—NDTV Profit Exclusive

Tata Capital has been classified as NBFC – Upper Layer by the banking regulator, Reserve Bank of India. As per the regulations released in September 2022 involving Upper Layer non-banking financial companies, "NBFCs classified as upper layer will require to be listed by September 2025."

It is noteworthy that Tata Capital along with its parent Tata Sons Pvt. Ltd. are amongst the 14 companies classified as Upper Layer by the Reserve Bank Of India.

Tata Capital was till recently classified as NBFC-CIC i.e. Core Investment Company. It also recently merged two of its subsidiaries — Tata Capital Financial Services and Tata Cleantech Capital.

Tata Capital Financial is into providing term loans, cash credit, working capital demand loans, overdraft facilities while Tata Cleantech Capital, a joint venture with IFC, is in the business of providing finance and advisory services for projects in Renewable Energy, Energy Efficiency, Waste Management, Water Management sectors.

The merger was effective Jan. 1, 2024, and IFC was allotted 7.16 crore shares in Tata Capital giving the multilateral financial institution around 2% stake in the company.

The financial services arm has now applied to the RBI to be converted into NBFC – ICC (Investment and Credit Companies) from NBFC- CIC.

Subsequent to the merger, it will have Tata Housing Finance Ltd. and Tata Securities and private equity business entities as subsidiaries. The housing finance arm is regulated by National Housing Board while Tata Securities and private equity are under the purview of Securities and Exchange Board of India.

Financials 

At the end of December 2023, Tata Capital had a loan book of Rs 1.49 lakh crore with 88% to Retail and small and medium enterprises or SMEs. In the retail portfolio, mortgages accounted for 50%, autos at 20% and unsecured lending at 23%.

For the nine-month period ending December 2023, disbursals grew at 39% to Rs 74,498 crore while loans book grew at 34% to Rs 1,49,165 crore.

Net Income for the nine months ending December 2023 rose 37% to Rs 6297 crore and profit after tax rose 34% to Rs 2367 crore.