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Tata Capital has seen a significant rise in its valuation within the unlisted market, reaching ₹1.5 lakh crore, making it the third largest non-bank lender in India. This comes six months after it made its entry into this market. The company is now surpassed only by Bajaj Finance and Bajaj Finserv.
The shares of Tata Capital are privately traded at ₹400-425 each, with an unprecedented high of ₹500 per share achieved in August 2023. Despite its shares trading at almost nine times the book value per share – a ratio deemed high within the sector – Tata Capital issued and allotted 44 million shares at a premium of ₹125.10 in FY23. This led to an aggregate of ₹593.80 crore on a rights basis to its current equity shareholders.
In September 2022, the Reserve Bank of India (RBI) classified Tata Capital Financial Services as an upper-tier non-bank lender. This classification necessitates an Initial Public Offering (IPO) by 2025 and also mandates the implementation of an enhanced regulatory framework that has been approved by the board.
The rapid escalation in Tata Capital’s valuation and its position among the top non-bank lenders in India signifies its strong performance in the unlisted market since its entry six months ago. With an IPO looming by 2025, it will be interesting to observe how the company continues to navigate its growth trajectory.
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