Tata Capital, the financial services arm of Tata Sons, has appointed around 10 investment banks to manage its initial public offering (IPO), which is scheduled this year, it has been announced.

The IPO is in line with RBI’s mandatory requirement for “upper layer” NBFCs to list within three years of being notified, which is September 2025.

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SBI Capital Markets, Kotak Mahindra Capital, Axis Capital, JP Morgan, HDFC Bank, Citibank, ICICI Securities, HSBC Securities, IIFL Capital and BNP Paribas are the investment banks which have been roped in to handle the share sale.

Tata Capital had initiated work on its IPO to comply with regulatory norms. The expected issue size is in excess of Rs 15,000 crore for which Kotak Mahindra Capital and law firm Cyril Amarchand Mangaldas have been roped in as early-stage advisors.

As on March 31, 2024, Tata Sons directly owned 92.83% in Tata Capital Limited while the balance stake was held by other Tata Group entities and IFC.

Tata Sons shareholding in Tata Capital is unlikely to fall below 75% after Tata Capital’s planned public listing, a Fitch report released last month had stated.

On February 25, the Tata Capital board approved the IPO plan and said it will comprise a fresh issue of up to 230 million shares and an offer for sale of equity shares by its existing shareholders. The IPO is subject to market conditions, and regulatory clearances, the company had stated.

Tata Capital’s board also cleared a rights issue to raise Rs 1,504 crore prior to the launch of the IPO. Tata Sons will subscribe to the entire portion of the rights issue, the disclosure stated.

Tata Capital is likely to file its draft papers by March end or early April through the confidential pre-filing route which was introduced by SEBI as an alternative for main board issuers in November 2022.

The pre-filing route allows companies to keep sensitive business details or financial metrics and risks under wrap, especially from rivals. This method gives IPO issuers the comfort of confidentiality till they arrive at a final decision on the listing, and if required, they can even pull out later, depending on market conditions, without disclosing key information.