IFC set to make multibagger winnings in Tata Capital IPO

The International Finance Corporation has been set up to grab a Flor return from the initial public offer of USD 2 billion from Tata Capital (RS 17,000 Crore), because the World Bank Group-arm tries to reduce its interest in the non-bank financing company.

The International Finance Corporation (IFC) will discharge 3.58 crore shares in the range and leave part of an early bet on the Cleantech Business of Tata Capital in 2011, according to the updated Red Herring Prospectus (DRHP).

Tata Capital will probably launch its USD 2 billion Initial Public Offer (IPO) in the first half of October after the Reserve Bank of India (RBI) has granted an extension to mention its shares on Bourses, said people who are familiar with the business.

Earlier, the non-banking financing company was given time until 30 September to mention at fairs.

IFC, the private arm of the World Bank Group, worked together with Tata Capital in 2011 to set up Tata Cleantech Capital LTD (TCCL), with the mandate to finance renewable and sustainable infrastructure projects. At the time, clean energy in India was still considered a subsidy-reliant sector.

In the past decade, TCCL has emerged as an important green financier, which has supported more than 500 renewable projects in solar energy, wind, biomass, small hydro, water treatment and electric mobility. Pursher has punished the company more than 22,400 MW of clean energy capacity and has built one of the most extensive Cleantech portfolios in the country. At FY25, the Cleantech and Infrastructure Finance Loan Book RS had exceeded 18,000 crore and grew with a CAGR of almost 32 percent in the past two years, design papers was on. After a merger of TCCL with Tata Capital, IFC now has 7.16 crore shares, or approximately 1.8 per cent in the older NBFC. Of these, the plans are to load 3.58 crore shares in the upcoming IPO.

IFC was introduced at a modified price of approximately RS 25 per share, so that the total investment was appreciated at approximately RS 179 Crore. At the RS 343 court price per share, this interest is worth 2 2,458 crore, which translates into a notional profit of approximately RS 2,278 Crore. The investment in Tata Capital has been delivered almost 13 times and has been very worthwhile for IFC.

The potential profits are based on the valuation of the law problem. The IPO price is expected to be higher, which could further improve the returns of IFC, said people who are familiar with the matter.

In July, Tata Capital RS increased 1.752 Crore by a fair matter priced on RS 343 per share.

The upcoming IPO will include a new edition of a maximum of 21 crore shares and an offer (OFS) of a maximum of 26.58 crore shares, including 23 crore shares of promoter Tata Sons and 3.58 crore shares of IFC, submitted according to the updated concept papers in August.

Promoter Tata Sons owns 88.6 percent of Tata Capital.

The proceeds from the new issue will be used to increase the growth of the Tier-I capital and the fuel loans.

If successful, the IPO becomes the greatest public issue in the financial sector of India. It will also mark the second public list of the Tata Group in recent years, after the debut of Tata Technologies in November 2023.

The IPO is executed in accordance with the list mandate of the RBI for NBFCs of the top layer, for which they have to be stated within three years of classification. Tata Capital was referred to in September 2022 as an upper layer of NBFC.