Tata Capital, a key subsidiary of Tata Sons, has successfully converted into a Non-Banking Financial Company – Investment Credit Company (NBFC-ICC) from its previous status as an NBFC – Core Investment Company (CIC). This conversion follows the recent merger of Tata Cleantech Capital and Tata Capital Financial Services into Tata Capital, a move that consolidated the company’s financial operations.
In a recent filing with the stock exchanges, Tata Capital confirmed the receipt of the Certificate of Registration from the Reserve Bank of India (RBI), officially recognizing its status as an NBFC-ICC. The company had been operating under this new classification since January 1, 2024, following a no-objection certificate from the RBI.
‘This milestone marks a significant step in Tata Capital’s evolution as a leading financial services provider in India,’ the company stated. The merger and subsequent conversion align with Tata Capital’s strategy to streamline operations and enhance its position in the financial market.
The merger of Tata Cleantech Capital and Tata Capital Financial Services was completed on January 1, 2024, and the certificates of registration for these entities were surrendered and cancelled following the conversion of Tata Capital into an NBFC-ICC.
The move comes amid Tata Capital’s preparation for a potential public listing, mandated by the RBI’s regulations for large NBFCs. Tata Capital and its parent company, Tata Sons, were classified as upper-layer NBFCs by the RBI in 2022, requiring them to list their shares on a stock exchange by September 2025.
In related developments, Tata Capital is in the process of merging with Tata Motor Finance Ltd (TMFL), a subsidiary of Tata Motors Finance Holdings. This merger, announced in June 2024, is expected to be completed within 9-12 months, with an appointed date of April 1, 2024. As part of the merger, Tata Capital will issue equity shares to TMFL shareholders, resulting in Tata Motors holding a 4.7% stake in the merged entity.
The merger is seen as a critical step towards Tata Capital’s IPO, which has generated significant interest in the grey market, where the company’s unlisted shares have surged by over 46% in the past six months. Market analysts anticipate that Tata Capital could launch its IPO within the next year, ahead of the RBI’s September 2025 deadline.
The RBI’s stringent regulations on NBFCs, introduced following the IL&FS crisis in 2018, have driven this transformation. Tata Capital’s successful conversion to an NBFC-ICC and its forthcoming public listing reflect the company’s proactive approach to navigating the evolving regulatory landscape.
