rewrite this title and make it good for SEOTata Capital files draft papers for $2-billion IPO through confidential pre-filing route

Tata Group financial services firm Tata Capital has filed draft papers with markets regulator Sebi for a USD 2 billion initial public offering (IPO) through a confidential pre-filing route.

At this size, the company is expected to be valued around USD 11 billion, according to sources.

In a stock exchange filing, Tata Capital said, “The company has filed the Pre-filed draft red herring prospectus (DRHP) dated April 4, 2025, under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, with Sebi, BSE, and NSE in connection with its Initial Public Offering of equity shares of face value of Rs 10 each.” The IPO will consist of a fresh issue of equity shares, along with an offer for sale (OFS) by certain shareholders.

According to a disclosure made to stock exchanges last month, the proposed IPO will include 2.3 crore equity shares through a fresh issue and OFS by existing shareholders.

Last month, sources told PTI that Tata Capital’s IPO size could be USD 2 billion (over Rs 17,000 crore) valuing the company around USD 11 billion.

Tata Capital, identified by the Reserve Bank of India (RBI) as an upper-layer non-banking finance company (NBFC), has already secured board’s approval to proceed with the initial share sale.

Notably, Tata Sons, the holding company of Tata Capital, owns a 92.83 per cent stake in the company.

If successful, this IPO will be the largest initial share sales in the country’s financial sector. It will also mark the Tata Group’s second public market debut in recent years, following the listing of Tata Technologies in November 2023.

This move is part of the company’s efforts to comply with the Reserve Bank of India’s (RBI’s) listing requirements.

As per the RBI mandate, upper-layer NBFCs are required to list on the stock exchange within three years of being designated as such. Tata Capital was categorised as an upper-layer NBFC in September 2022.

Tata Capital’s decision to opt for the confidential pre-filing route is part of a growing trend among Indian companies. This route allows companies to withhold public disclosure of details under the draft red herring prospectus (DRHP) until later stages.

Last month, edtech unicorn PhysicsWallah also opted for the confidential filing route. In 2024, food delivery giant Swiggy and supermart major Vishal Mega Mart floated their IPOs after making confidential filings.

Earlier, online hotel aggregator OYO had taken the confidential filing route in 2023 but eventually did not proceed with its IPO. Tata Play, formerly known as Tata Sky, was the first company in India to utilise this option for an IPO in December 2022, and secured Sebi’s observation letter in April 2023. Although it later withdrew from the public issue.

Markets experts believe that the confidential pre-filing route provides flexibility and reduces pressure on companies to go public. Unlike the traditional route, where IPOs must be launched within 12 months of Sebi’s approval, the pre-filing route allows companies to float an IPO within 18 months from Sebi’s final comments.This route also offers the flexibility to adjust the primary issue size by up to 50 per cent until the updated DRHP stage, they added.