Tata Capital, the financial services arm of the Tata Group, is preparing for a landmark Initial Public Offering (IPO) with expectations of achieving a valuation as high as $11 billion. The offering could raise up to $2 billion through a combination of primary and secondary share sales, marking it as one of the most significant IPOs in India this year.

The board of Tata Capital has already approved the listing of 230 million shares, which will include equity sales by existing shareholders. A rights issue worth ₹1,504 crore ($172 million) has also been announced as part of the preparations. This IPO is closely watched as an indicator of the Tata Group's financial transformation and its strong position in the financial services sector.

Tata Capital, an NBFC with over 900 branches across India, provides a range of financial services, including retail and commercial lending, wealth management, and microfinance. The company has shown consistent revenue growth but faced challenges like a 50% jump in losses during the December 2024 quarter. The IPO aims to strengthen its balance sheet and fund expansion, technology upgrades, and debt repayment.

Despite its strong brand and market presence, Tata Capital faces risks such as regulatory changes, market volatility, competition from fintech startups, and potential increases in non-performing assets (NPAs). Cyril Amarchand Mangaldas and Kotak Mahindra Capital have been enlisted as advisors for the listing. Market analysts anticipate high investor demand due to Tata's reputation, sound management, and the growing financial services industry in India. The IPO is expected to set a benchmark for future IPOs in the financial sector.