Unlisted shares of Tata Capital, a majority-owned subsidiary of Tata Sons, have risen over 46 per cent in the grey market in the last six months, its market cap surging to $48 billion in that time from around $33 billion.
At this level of market cap, it is close on the heels of Bajaj Finance which has a market cap of around $50 billion. It is the third biggest diversified non-banking finance company in India and its loan book size crossed ₹1.5 lakh crore in FY24, with a growth of 35 per cent.
There was a steep rise in the shares of Tata Capital between January and May, after which it cooled down before starting to rise again from the mid-June. Over a one-year period the shares have nearly doubled.
There are expectations of Tata Capital launching its initial public offer of shares next year, with the Reserve Bank of India having categorised it as an upper layer non-banking finance company.
It has been undertaking a series of restructuring exercises, which the market is interpreting as preparation for its public listing. In FY23 it merged its subsidiaries Tata Capital Financial Services and Tata Cleantech Capital with itself to create a larger unified entity with a stronger capital base and assets. In June, this year the merger of Tata Motors Finance with Tata Capital was announced, boosting its presence in vehicle financing segment.
FY24 performance
In FY24 the NBFC’s loan disbursals rose 40 per cent on year to ₹1.05 lakh crore. Around 85 per cent of its loan book was to retail and MSME segments and the NBFC plans to diversify it while focusing on the core segment. Last year it also introduced student loans for those pursuing higher studies in India, the USA, Canada, the UK, Australia, New Zealand, Germany, Singapore, and Dubai
Net profit rose 37 per cent to ₹3150 crore, and total income rose 33.4 per cent to ₹18198.4 crore. Net interest income was 31 per cent higher at ₹8,069 crore.
Gross non-performing assets fell 20 bps to 1.5 per cent and net NPAs were at 0.4 per cent.
It added 1.2 million customers during the year and opened 285 branches.