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Tata Capital, which is an IPO bound entity, may be strengthened, before hitting the market. According to the Economic Times, Tata Motors Finance Ltd., which is an arm of Tata Motors for vehicular financing, will be merged with Tata Capital, which is expected to issue its Initial Public offering, later this year. Tata Motors itself is a subsidiary of the group’s holding company, Tata Sons.
Tata Sons, An Upper Layer NBFC
It is to be noted, that Tata Sons, along with some other comp.es, were deemed as NBFC upper layer institutions. An upper-layer NBFC is an entity identified by the Reserve Bank of India (RBI), which is deemed to have in place, an enhanced regulatory system.
This move, therefore, is seen as a move to streamline its operations and stabilise its balance sheet.
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This would put Tata Sons on the block for getting listed itself and, therefore, issuing an IPO before 2025.
This move, therefore, is seen as a move to streamline its operations and stabilise its balance sheet.
The process of the merger will be accomplished through a share-swap agreement. Tata Sons, the aforementioned holding company, will offer shares of Tata Capital to Tata Motors.
Tata Motor Finance’s value is pegged in the range of Rs 15,000-20,000 crore. In addition, the market capitalization of the IPO-bound Tata Capital is said to be Rs 363,654 crore. The report from the publication saw no response from either of the entities. However, it appears to have gone well with its investors. On May 10, Tata Motors shares gained 0.62 to reach Rs 1,036.70, per share.
