Tata Capital the financial services arm of the Tata Group is set to raise over $2 billion (Rs 17000 crore) through an initial public offering (IPO). According to a PTI report the company will file preliminary papers with the Securities and Exchange Board of India (SEBI) only after receiving final approval from the National Company Law Tribunal (NCLT) for its merger with Tata Motors Finance. At the anticipated IPO size Tata Capital is expected to be valued at around $11 billion. The NCLTs final order on the merger is expected by the end of the current financial year (FY25) for the IPO filing according to reports. Tata Capital classified as an upper-layer non-banking financial company (NBFC) by the Reserve Bank of India (RBI) has already secured board approval for the share sale. However an official statement from the company regarding the draft filing is awaited. Tata Capital IPO The proposed IPO would comprise 2.3 crore equity shares by way of a fresh issue and an offer of sale (OFS) by certain existing shareholders according to a disclosure made to stock exchanges. Apart from the IPO Tata Capital announced plans to raise funds through a rights issue to further bolster its financial position before the public listing. If successful this would be one of the biggest initial share sales in the countrys financial sector. This would also be the Tata Groups second public market debut in recent years after the listing of Tata Technologies in November 2023. The move is part of the companys effort to comply with the RBIs listing requirements. RBI Mandate For NBFC As per the RBI mandate upper-layer NBFCs are required to list on the stock exchange within three years of being designated as an upper-layer NBFC. Tata Capital was categorised as an upper-layer NBFC in September 2022. Apart from Tata Capital another upper layer NBFC HDB Financial Services owned by HDFC Bank is also gearing up to launch its IPO. The company filed its draft papers in October to garner Rs 12500 crore through the initial share sale. While law firm Cyril Amarchand Mangaldas and investment bank Kotak Mahindra Capital have been roped in as advisors to manage the companys IPO a draft red herring prospectus (DRHP) with Sebi will be filed only after receiving approval of the NCLT on the proposed merger sources said. In the Q3 earnings call of Tata Motors the auto makers Group CFO PB Balaji said the Tata Motors Finance creditors meeting has been completed. Final orders (are) awaited from the NCLT and we do expect closure for this by the end of this financial year he had stated. In September the Competition Commission of India (CCI) cleared the proposed merger. In June 2024 the board of all three companies -- Tata Capital Tata Motors Finance and Tata Motors -- approved a merger of Tata Motors Finance with Tata Capital through an NCLT scheme of arrangement. Tata Sons is a holding company of Tata Capital owning a 92.83 per cent stake.  (With Inputs From PTI)