Tata Capital, a financial services arm of the Tata Group, has begun preparations for a Rs 15,000-crore Initial Public Offering (IPO). The move has sparked a rally in Tata group shares, with some stocks rising by as much as 13 percent in intraday trading on Tuesday. The IPO is expected to include a mix of primary and secondary share sales.
Shares of Tata Chemicals, Tata Motors, and Tata Investment Corp gained traction due to their equity share holdings in Tata Sons or Tata Capital. Tata Chemicals, which holds a 3 percent stake in Tata Sons, saw a rise of 4.2 percent to Rs 6,799. Tata Motors, holding a 4.7 percent stake in Tata Capital and a 3 percent equity stake in Tata Sons, was up 1.9 percent to Rs 736.
Tata Investment Corporation, with a 2.15 percent direct stake in Tata Capital, emerged as the biggest gainer, rising 3.2 percent to Rs 1,068. Cyril Amarchand Mangaldas and Kotak Mahindra Capital have been appointed as advisors for the IPO, with further investment banking partnerships expected.
Tata stocks driven by IPO buzz
The listing is anticipated to generate significant funds and unlock value for Tata Capital and other Tata group companies associated through stakes in Tata Sons or Tata Capital. The IPO announcement aligns with the Reserve Bank of India’s (RBI) directive for ‘upper-layer’ non-banking financial companies (NBFCs) to list by September 2025. As of March 2024, Tata Capital reported assets under management (AUM) of Rs 158,479 crore, up from Rs 119,950 crore a year earlier.
The stock rally builds on prior movements seen in Tata Chemicals and Tata Investment Corporation earlier this year, amid speculations of Tata Sons’ potential listing. Tata Sons, valued over Rs 11 lakh crore, has a unique ownership structure involving Tata Trusts, Shapoorji Pallonji Group, other Tata group companies, and the Tata family. Tata Investment Corporation, in particular, experienced a notable increase of 6.97% on December 24, 2024, outperforming its sector by 5.1%.
After eight consecutive days of decline, the stock marked a trend reversal, reaching an intraday high of Rs 6869.9, reflecting a gain of 5.17%. The trading session was characterized by high volatility, with an intraday volatility rate of 9.01%. The stock is currently trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a positive short-term trend.
