Tata Capital eyes higher valuation in IPO, updated prospectus likely this week: Report
Mumbai: Tata Capital Ltd. is aiming for a valuation between $18 billion and $20 billion in its upcoming initial public offering, significantly higher than its earlier target of around $11 billion, Bloomberg reported.
The Tata Group’s financial services arm could file an updated draft red herring prospectus as early as this week, the sources said, requesting anonymity due to the confidential nature of the discussions.
The company is planning to raise approximately $2.2 billion through the IPO, which is likely to be launched in the first half of September, the report said.
The higher valuation comes on the back of a recent rights issue and renewed investor appetite for IPOs in India, particularly after the strong debut of HDB Financial Services Ltd., a fellow non-bank lender.
HDB raised around $1.5 billion in its IPO and surged nearly 14% on its trading debut, pushing its market value to about $7.7 billion.
If Tata Capital secures its targeted valuation, it would become India’s fourth-largest shadow bank, trailing Bajaj Finance Ltd. ($69 billion), Bajaj Finserv Ltd. ($38 billion), and Jio Financial Services Ltd. ($23 billion).
Tata Capital had filed confidential IPO documents in April and received a green light from the Securities and Exchange Board of India (SEBI) last month.
As per regulatory norms, companies must now submit an updated draft red herring prospectus and invite public comments before filing the final version.
The IPO also comes in response to Reserve Bank of India norms requiring large non-bank lenders to go public by the end of September.
India’s IPO momentum continues to build, with several big-ticket listings in the pipeline.
LG Electronics’ local arm is reportedly eyeing a $1.7 billion issue, and Kotak Mahindra Capital expects over $30 billion to be raised via IPOs in the country over the next 12 months, an executive told Bloomberg this week.
Tata Capital and parent company Tata Sons Pvt. have not commented on the IPO developments.
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