Tata Capital, the financial services arm of the iconic Tata Group, is gearing up to launch one of the most significant initial public offerings (IPOs) in India in 2025. With a targeted issue size of $2 billion (approximately ₹17,000 crore), this IPO marks a pivotal milestone both for Tata Capital and the broader non-banking financial company (NBFC) sector. It not only represents a regulatory milestone but also reflects Tata Capital’s impressive growth trajectory and strategic positioning in areas such as clean technology finance. 

This blog covers the background, financial performance, IPO structure, key investors’ stake movements, and the promising investment opportunity this IPO presents. 

Background: From Tata Cleantech Capital to Tata Capital 

The International Finance Corporation (IFC), part of the World Bank Group, partnered with Tata Capital in 2011 to establish Tata Cleantech Capital Ltd (TCCL). This initiative was designed to foster financing for renewable energy and sustainable infrastructure projects at a time when India’s clean technology sector faced considerable challenges related to subsidies and investment risk. 

Over the past decade, TCCL matured into one of India’s leading green financiers, supporting over 500 renewable projects spanning solar, wind, biomass, small hydro, water treatment, and electric mobility. By fiscal year 2025, Tata Cleantech’s loan book crossed ₹18,000 crore, reflecting a compound annual growth rate (CAGR) near 32% over the prior two years, making a significant contribution to Tata Capital’s business and growth profile. 

In a strategic consolidation, TCCL merged with Tata Capital, integrating cleantech finance with Tata Capital’s broader NBFC operations. This merger has created a powerful financial institution with diversified lending capabilities and a robust green finance portfolio. 

Tata Capital’s Financial Performance and Market Position 

Tata Capital stands today as one of India’s largest NBFCs, ranked seventh by loan book size with a total loan book of ₹2.26 trillion as of March 2025. The company has demonstrated consistent growth, posting a profit after tax (PAT) of ₹3,646 crore in FY25, up from ₹3,029 crore in FY23. Quarter-on-quarter performance also highlights growth, with Q1 FY26 net profit doubling year-over-year to ₹1,041 crore. 

Its diversified lending portfolio includes consumer loans, commercial finance, private equity, loans against property, and wealth management services, along with a deep focus on sustaining and expanding its cleantech finance vertical. Tata Capital’s total assets grew robustly, from ₹1.35 lakh crore in 2023 to ₹1.76 lakh crore in 2024, exemplifying strong balance sheet growth and capital adequacy. 

International Finance Corporation’s Multibagger Returns 

A noteworthy highlight in the IPO narrative is the lucrative early investment by IFC in Tata Capital. IFC initially entered at an adjusted equity price of about ₹25 per share back in 2011, investing approximately ₹179 crore. Following the merger and subsequent equity actions including a rights issue priced at ₹343 per share in July 2025, IFC’s 7.16 crore-share holding is now valued at nearly ₹2,458 crore. 

IFC plans to sell 3.58 crore shares in the upcoming IPO, which would realize a notional gain of about ₹2,278 crore—an approximate 13-fold multiple on the original investment. Market sources anticipate that the IPO pricing could be even higher than the rights issue price, potentially delivering greater returns to IFC and other shareholders alike. 

IPO Structure and Timeline 

The Tata Capital IPO is structured as a combination of a fresh equity issuance and an offer for sale (OFS) by existing shareholders, comprising a total of approximately 47.58 crore shares. 

• Fresh Issue: Up to 21 crore new shares to raise capital for business growth. 

• Offer for Sale (OFS): Up to 26.58 crore shares sold by existing investors. 

• Tata Sons, the promoter, plans to divest up to 23 crore shares. 

• IFC will sell 3.58 crore shares, marking a partial exit. 

Currently, Tata Sons holds an 88.6% stake, while IFC owns about 1.8% before the OFS. 

The capital raised from the fresh issue will primarily augment Tata Capital’s Tier-1 capital, strengthening its borrowing capacity and facilitating lending expansion, especially in infrastructure and cleantech segments. 

The IPO is slated for launch in the first half of October 2025, following an extension granted by the Reserve Bank of India to meet its regulatory deadline. It also fulfills RBI’s mandate for NBFCs classified as upper-layer entities to be publicly listed within three years of designation (Tata Capital was classified as upper-layer in September 2022). 

Regulatory and Market Significance 

Tata Capital’s IPO is notable for being among India’s largest financial sector public issues in recent years and the Tata Group’s second IPO launch within two years after Tata Technologies’ debut in November 2023. 

Under RBI’s Scale-Based Regulation (SBR) framework, upper-layer NBFCs face enhanced compliance and capital requirements, including mandatory listing. Tata Capital’s timely IPO aligns with this regulatory environment, setting an important benchmark for other NBFCs aspiring public status. 

From a market perspective, investor demand for Tata Capital shares in the unlisted segment has surged, with price multiples rising significantly in anticipation of the public listing. This IPO is expected to attract a broad investor base, including institutional and retail investors, due to Tata Capital’s strong brand, steady earnings growth, and strategic positioning in emerging sectors like green finance. 

Tata Capital’s Growth Prospects and Strategy 

Post-IPO, Tata Capital aims to leverage the raised capital to expand its lending business, especially in high-growth sectors such as renewable energy, infrastructure finance, and sustainable projects. The company’s cleantech finance subsidiary is well-positioned to benefit from India’s commitment to climate goals and emission reductions, driving demand for green lending. 

Additionally, Tata Capital plans to deepen its retail and consumer financing portfolios, diversifying its revenue streams while maintaining a conservative risk profile. With robust financial health and strong governance under the Tata Group umbrella, the company is poised for continued market leadership. 

Conclusion: An Attractive Investment and Market Milestone 

Tata Capital’s $2 billion IPO represents a major landmark for the Indian financial markets, blending growth potential with regulatory compliance. The transaction highlights the value creation generated over the past decade through Tata’s cleantech finance strategy, capped by the multibagger gains earned by early investor IFC. 

For investors, this IPO offers an opportunity to invest in a systemic NBFC with one of the largest loan books in India, a diversified lending portfolio, and a promising growth outlook in green finance and infrastructure sectors. 

As the IPO date approaches in October 2025, market participants will be closely watching Tata Capital’s pricing, demand dynamics, and likely listing gains, all of which are expected to contribute to one of the marquee public offerings of the year.