The Non-Banking Financial Company (NBFC) sector in India plays a significant role in providing financial services, particularly in underserved markets where traditional banks may not be present. NBFCs offer various financial products, including loans, investments, and insurance, catering to a diverse customer base. With rapid urbanization, digitalization, and increasing demand for credit, the NBFC sector has seen substantial growth in recent years, contributing to financial inclusion and economic development.
Challenges and Regulations Faced by NBFCs After RBI Guidelines
However, NBFCs face challenges such as stringent regulatory requirements imposed by the Reserve Bank of India (RBI), including capital adequacy norms, asset quality standards, and liquidity requirements. Following the 2018 crisis of high-profile defaults, the RBI tightened regulations to ensure greater stability and transparency. NBFCs must now comply with enhanced disclosures, governance standards, and periodic stress tests. These measures, while essential for risk mitigation, impose operational challenges, particularly for smaller or mid-sized players.
Shae Price
The shares of TATA Investment Corporation jumped 12% to touch an intraday high of Rs. 7,314. The stock is currently trading at Rs. 7,270 up by 11.38% from its previous close of Rs. 6,527 as of December 24, 2025.
Recent Update
Tata Capital’s IPO Plans
Tata Capital, a non-banking financial services (NBFC) firm and a subsidiary of Tata Sons, is gearing up for its Initial Public Offering (IPO). According to recent reports, the company has engaged law firm Cyril Amarchand Mangaldas and investment bank Kotak Mahindra Capital as advisors to assist in the process. Tata Capital, one of the prominent players in the financial services sector, is poised to be a key player in the market post-IPO.
Compliance with RBI Norms
The IPO is being initiated in line with the Reserve Bank of India’s (RBI) regulations for ‘upper layer’ NBFCs. The RBI’s guidelines mandate that these entities list their shares by 2025, and Tata Capital is expected to comply by listing its shares by September 2025. While the final details of the IPO, including the quantum, are still being deliberated, reports suggest the deal could raise over ₹15,000 crore, marking a significant milestone for the firm.
Merger with Tata Motors Finance
In a strategic move, Tata Capital has merged with Tata Motors Finance (TMFL), a key decision approved by the RBI in October 2024. This merger has facilitated the formation of India’s 12th largest non-banking finance company, further strengthening Tata Capital’s position in the NBFC market. The RBI’s approval of the merger has set the stage for the company’s public listing and underscores the growing scale and market presence of Tata Capital.
IPO Timeline and Expectations
The company is expected to launch its IPO by September 2025, adhering to the RBI’s mandate for ‘upper layer’ NBFCs to list their shares by this deadline. The IPO is anticipated to be a high-profile one, with significant interest from investors due to Tata Capital’s strong market presence and the financial backing of Tata Sons. The combination of the merger and the IPO signals a new phase of growth for Tata Capital in the Indian financial services sector.
Written By: Dipangshu Kundu
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