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When it comes to financial services Tata Capital always emerges as a major player in the lending market. Known for its trust and variety of services in the market, Tata Capital always grabs the attention ahead of its competitors. This is an in-depth analysis of Tata Capital Financial's performance for the fiscal year 2023-24.
Financial Performance Of Tata Capital Unlisted Share
The loan book of Tata Capital saw a 35% jump to Rs 1,57,761 crore in FY 24 from Rs 1,16,789 Cr in the previous year. This is a substantial increase over 1 year. Such strong growth in the loan book reflects Tata Capital’s aggressive lending activities and an increasing future demand for its products and services.
If we check their Net Interest Income(including fees collected), it has shown a significant 31% increase from Rs 6157 crore in FY 23 to Rs 8069 crore in FY 24. Simultaneously, the average asset strength has also increased.
Due to this, the Net Interest Margin(NIM) remained at almost the same level of 6.1% in FY 24 as against 6.2% the previous year, indicating a stable management of interest income and expenses.
Despite an insignificant change in NIM, the profitability of Tata Capital increased as the Profit After Tax(PAT) grew from Rs 2,300 crore in FY 23 to Rs 3,150 crore in FY24, highlighting a 37% increase.
The Shareholder’s wealth has also increased as the Earnings Per Share (EPS) has grown by almost 5% from Rs 6.47 per share in FY 23 to Rs 6.78 per share.
Analyzing the Asset Quality of Tata Capital
The Gross NPA % which is a percentage of Gross NPA to Total Assets has improved from 1.78% in FY 23 to 1.71% in FY suggesting an improvement in the asset quality.
A Provision Coverage Ratio(PCR) of 70% tells us that the NBFC is not at risk and asset quality is taken care of. Although Tata Capital’s risk coverage ratio has decreased from 84% in FY 23 to 78.37% in FY 24. it's still way above the 70% mark.
A 123% Annual Return of Tata Capital Unlisted Shares
Till June 23 tata capital stock price was at a constant around Rs 460 per share. The share started spiking from Jun 23, when they got a nod from SEBI to float its IPO. On Dec 23 the price reached Rs 750 per share when the company announced a right issue.
And by May 24, the share price is trending around Rs 1,029 i.e. more than 123% return is just 1 year. Investors who invested have seen such substantial growth in their wealth. All this reflects a highly positive market sentiment and a strong performance by Tata Capital.
Tata Motor Finance to merge with Tata Capital before IPO
Tata Motors’ strategic move to spin off and merge with Tata Capital ahead of its IPO. This move will allow Tata Motors to offer its shares for Tata Capital. Tata Motors is planning to split its vehicle financing subsidiaries, currently under Tata Motors Finance Ltd, and merge them with Tata Capital. As reported by Economic Times, this step aims to streamline operations and reduce its debt burden.
The proposed transaction will involve a share-swap arrangement, wherein Tata Sons, the holding company of the Tata Group, will offer shares of Tata Capital to Tata Motors. The valuation of the finance unit is coming between Rs 15000-20000 crores which is roughly 2.6-3.5X valuation of the current book value of Rs 5,625 crore.
Invest in Tata Capital before the IPO
Tata Capital has been growing substantially in its operations as well as market performance which is reflected in the tata capital share price . The NBFC is planning for an IPO in 2024 end or 2025. This may be the right time for you to increase your wealth by investing in a trending pre-IPO stock like Tata Capital.
You can buy Tata Capital Ltd unlisted shares with the help of Stockify. Here you can access its updated share price and year-wise financial data. Our professionals help you pick and invest in the right pre-IPO stocks.
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