How Tata Capital’s Model Differs from Other Finance Firms

Looking to understand Tata Capital's unique approach in the Indian finance industry? In this blog, we'll explore what sets Tata Capital apart from other finance providers in India. Tata Capital has redefined the financial landscape with a business model that sets the stage for success. We'll get into their innovative strategies, customer-centric approach, and commitment to ethical practices. Learn how Tata Capital's offerings cater to diverse financial needs, whether personal loans, home loans, or business financing. Join us as we unravel the distinctive features that make Tata Capital a frontrunner in the Indian financial market as compared to its competitors, Bajaj Finserv and Muthoot Finance.

Tata Capital: Company Overview

Tata Capital, a part of the renowned Tata Group, was founded in 2007. Tata Sons Limited's subsidiary is crucial in the group's financial services endeavours, linked to the USD 108 billion Tata conglomerate. The company holds significance, encompassing Tata Capital Financial Services Limited (TCFSL), Tata Securities Limited, and Tata Capital Housing Finance Limited. Authorised by the Reserve Bank of India (RBI) as a Systemically Important Deposit Accepting Non-Banking Financial Company.

Tata Capital Business Model: At A Glance

Tata Capital offers a concentrated business model customised to meet diverse financial needs. As a subsidiary of Tata Sons Private Limited, it is a Systemically Important Non-Deposit Accepting Core Investment Company registered with the Reserve Bank of India.

Dedicated to delivering solutions, Tata Capital operates across several sectors, including Commercial Finance, Consumer Loans, Wealth Services, and the distribution and marketing of Tata Cards. Its subsidiary companies, such as Tata Capital Financial Services Limited, Tata Capital Housing Finance Limited, and Tata Cleantech Capital Limited, extend its reach. The company's service motive surrounds Commercial Finance, Investment Banking, Private Equity, Asset Finance, Consumer Loans, Cleantech Finance, and more.

Tata Capital Business Model Comparison With Bajaj Finserv And Muthoot Finance

Tata Capital operates as a successful business model with distinct features that set it apart in comparison with Bajaj Finserv and Muthoot Finance:

• Diversified Services: Tata Capital offers various B2B financing services, such as equipment financing, working capital loans, supply chain finance, trade finance, and invoice discounting. This diverse service portfolio caters to various business needs and captures a substantial market share.

• Competitive Fees and Interest Rates: Tata Capital balances fees and interest rates to cover costs and operating expenses. This strategy attracts customers and sustains profitability.

• Capital Management & Fund Strategies: The company focuses on effective capital management and liquidity optimisation, utilising funding strategies like capital market issuances and collaborating with Tata Group for favourable funding terms.

• Effective Operational Process: Leveraging advanced technology and automation, Tata Capital enhances operational efficiency in documentation, credit evaluation, disbursement, and loan origination, reducing costs and improving customer satisfaction.

• Independent Operation in Multiple Countries: Tata Capital's independent operations in over 100 countries contribute to its success, providing a broader scope and market presence.

In contrast, Bajaj Finserv excels in retail by seizing opportunities during financial crises, focusing on small and medium enterprises (SMEs), and offering diverse financial products. It generates revenue through fees, interest, and partnerships, utilising digital marketing methods for customer engagement.

Muthoot Finance offers value propositions like gold loans, money transfer services, insurance, and digital platforms. It caters to customers, including small businesses, salaried individuals, and SME business owners. The company's essential resources encompass subsidiaries, IT infrastructure, and qualified staff. Muthoot Finance engages customers through advertisements, app development, CSR activities, and efficient grievance redressal. Its revenue streams include interest income, service charges, and more.

Each company's business model leverages its strengths and unique offerings to succeed in the financial sector, catering to various customer segments and maintaining profitability. But Tata Capital has much to offer in the future as it wants to expand in the coming years.

Performance Of Tata Capital Unlisted Shares

Tata Capital Limited, operating in the financial sector as a Non-Banking Financial Company (NBFC), offers unlisted shares for investment. These shares can be acquired through NSDL or CDSL depositories. Tata Capital unlisted share price today stands at INR 540.0 per share. This investment opportunity is rated three out of five stars.

For the year 2023, key indicators reflect positive performance. The face value per share is INR 10.0, while the book value is INR 51.6. The Price to Earnings (PE) ratio is 64.5, and the Price to Sales ratio is 13.9. The Price Book ratio is 10.5, showing the potential value of Tata Capital Pre IPO stocks. Tata Capital has an impressive outstanding share count of 3507.0 million, contributing to a substantial market capitalisation of INR 1,893,780.0 million. The company maintains a relatively low Debt-to-Equity ratio of 6.5, indicating a balanced financial structure.

Regarding returns, Tata Capital demonstrates a dividend of INR 0.2 per share, with a dividend yield of 0.1% based on the current market price. The Return on Total Assets (ROTA) is 3.5%, while the Return on Equity (ROE) is a robust 26.2%. Additionally, the Return on Working Capital (ROWC) stands at an impressive 56.6%, signifying the company's operational efficiency and potential for growth. Also, you can connect with us to get the latest and updated information to buy unlisted shares.

FAQs

1. Is Tata Capital a banking company?

   Under the Tata Capital name, the Company provides its clients with fund and fee-based financial services. It is registered with the Reserve Bank of India as a Non-Deposit, Accepting Non-Banking Financial Company (NBFC).

2. Who owns Tata Capital?

   Tata Capital is a subsidiary of Tata Group owned by Rajiv Sabharwal.

3. What is Tata Capital Pre IPO share price?

   At present, Tata Capital Pre IPO share price is INR 540.

4. Is Tata Capital Planning for IPO?

   Tata Capital Ltd intends to begin its Initial Public Offering (IPO) of about Rs 20,000 crore as a part of the expansion strategy.

5. Is Tata Capital listed on BSE?

   No, Tata Capital is not listed on BSE. However, its unlisted shares are available in the grey market for investors.