Tata Capital's Expansion: Profitable Future Investment Plans

Tata Capital, a branch of Tata Son Limited, is renowned for its people-first financial solutions. The company serves a wide range of clients, including businesses, individuals, and institutions, directly or through its affiliated companies. With time, Tata Capital Ltd has secured its position among India's foremost financial service providers and experienced substantial growth.

Registered as an NBFC with the Reserve Bank of India (RBI), Tata Capital operates across various sectors like financing and investing. This privately-owned company, offering shares, even enables interested investors to purchase unlisted Tata Capital shares. Understanding Tata Capital's upcoming expansion strategies holds the utmost importance in making informed investment choices. This blog will guide you to the expansion plans of Tata Capital Ltd and how it can be a good choice for investment for you.

Tata Capital Merger Plan

In a recent stock exchange filing, Tata Capital revealed its plan to merge Tata Capital Financial Services and Tata Cleantech Capital with the parent company. This strategic move is aligned with the updated regulatory guidelines introduced by the Reserve Bank of India (RBI) for scaling operations.

The primary reason behind this merger is to enable Tata Capital Financial Services to adhere to the revised regulatory framework set forth by the RBI's scale-based regulations. Notably, in September 2022, the RBI categorised Tata Capital Financial Services as an 'upper layer' non-bank lender, necessitating the adoption of an applicable enhanced regulatory framework. Also, the company must get listed within three years of this classification.

The merger proposal is pending approvals from several entities, including the National Company Law Tribunal (NCLT), shareholders, creditors, and various regulatory bodies. This step signifies Tata Capital's commitment to complying with regulatory changes while streamlining its operations for greater efficiency and growth.

Tata Capital Plan to raise 3.38 Billion through debt in FY24

Tata Capital has revealed its plan to raise 280 billion rupees (approximately $3.38 billion) through debt instruments and bank lines in the fiscal year 2023-24. This initiative aims to support the company's anticipated double-digit growth in credit. Rajiv Sabharwal, the Managing Director, and CEO, stated that Tata Capital maintains a diversified approach to funding sources, encompassing bank funding, non-convertible debentures (NCDs), external commercial borrowing, and public debt issuance. The objective is to align liabilities with the targeted 15% credit growth while expanding the assets under management (AUM) by over 25%. The company's strategy focuses on retail segments and sectors with lower risk, particularly those related to manufacturing and clean energy. With Tata Capital's consolidated loan book reaching 1.28 trillion rupees as of June, the company plans to augment its wealth management business, venture into education financing, and add more branches to its network.

Tata Capital Plan to expand 300 branches

Tata Capital's branch network grows with 60 new additions this fiscal, surpassing 250 total branches and counters nationwide. With a focus on underserved customers, Tata Capital aims to exceed 300 branches in 2023, prioritising tier II and III markets. Presently serving 2.5 million customers, this expansion contrasts with the digital trend in the financial sector, demonstrating Tata Capital's commitment to localised service.

How These Expansion Plans Will Affect Tata Capital Unlisted Shares

Tata Capital's expansion plans can significantly impact the value of its unlisted shares. The merger of Tata Capital Financial Services and Tata Cleantech Capital with the leading company, driven by regulatory changes, shows Tata Capital's commitment to growth and efficiency. Their borrowing plan to raise $3.38 billion indicates a push for more lending and growth in safer areas like manufacturing and clean energy.

These expansion plans make Tata Capital unlisted stocks an appealing investment option. The merger could lead to streamlined operations and compliance, potentially boosting the company's performance. The investment to support credit growth aligns with their strategy, and the focus on underserved markets through branch expansion signifies the potential for an increased customer base and localised service. These factors together suggest a positive outlook for Tata Capital pre IPO shares.

In 2023, Tata Capital's unlisted shares showcased a variety of key indicators that shed light on their current performance. The face value per share stands at INR 10.0, reflecting the nominal value assigned to each share. The book value per share, a measure of the company's net worth on a per-share basis, stands at INR 51.6.

The price-to-earnings (PE) ratio, an essential valuation metric, is at 64.5, indicating the market's valuation of the company's earnings. Furthermore, the price-to-sales ratio, which relates the share price to the company's sales per share, is recorded at 13.9. The price-to-book ratio, measuring the share price relative to the book value per share, is calculated at 10.5.

With 3507.0 million outstanding shares, Tata Capital's unlisted shares contribute significantly to a substantial market capitalization of INR 1,893,780.0 million. This value signifies the total market worth of the company's outstanding shares. The debt-to-equity ratio, a measure of financial leverage, is at 6.5, indicating the proportion of debt financing compared to equity.

Presently, Tata Capital unlisted shares are trading at INR 540, which signifies their current market value. To learn more about Tata Capital Pre IPO Shares, you can visit our website to decide if it will turn into an excellent decision to buy unlisted shares.