Tata Sons Misses 30 September IPO Deadline, Operations Continue Pending RBI Decision

As the deadline of 30 September 2025 has lapsed, Tata Sons, the holding company of India’s $200 billion Tata Group, has reached a turning point. The Reserve Bank of India (RBI) had mandated Tata Sons, an upper-layer non-banking financial company (NBFC), to list on stock exchanges by this date. Although Tata Sons missed the deadline, the RBI has said that Tata Sons can keep operating until its registration is legally cancelled, thus easing immediate regulatory pressure.

What’s Happening?

Tata Capital, the Tata Group’s leading investment company, was expected to go public by September 2025. In September 2022, the RBI had classified Tata Capital as an “upper-layer systemically important NBFC,” giving it three years to list on the stock market.

Tata Capital, a non-deposit-taking NBFC, had its initial public offering (IPO) committee approve the public offering in July 2025, following Securities and Exchange Board of India’s (SEBI) regulations. If launched, this would be one of India’s largest NBFC IPOs, valued at ₹15,512 crore. The IPO consists of a total of 47.58 crore shares, of which 21 crore are fresh shares and 26.58 crore are offered for sale (OFS). Of the OFS portion, Tata Sons is selling 23 crore shares, while the International Finance Corporation (IFC), which holds a 1.8% stake in the company, is selling 3.58 crore shares.

Internal Divisions and Strategic Concerns

The pressure for de-listing is not just a matter of regulation but also governance. Tata Sons is predominantly controlled by Tata Trusts with a 66% stake, while the Shapoorji Pallonji Group has a stake of about 18%. While filing the Draft Red Herring Prospectus (DRHP), the Trusts were in favour of maintaining Tata Sons as a private entity, given issues of control and strategic adaptability. Nonetheless, the Shapoorji Pallonji Group has pushed for an IPO to enhance liquidity and correct the financial issues the company was experiencing.

This division has created internal conflicts, with reports of boardroom conflicts and leadership overhauls. For instance, Vijay Singh, Vice-Chairman of Tata Trusts, stepped down from the board of Tata Sons, portraying the widening gap in the organisation’s leadership.

Tata Sons officials maintain that a rushed listing may limit the company from taking strategic long-term calls, especially in capital-intensive industries such as semiconductors and aviation. They say it is better to focus on preparing the group for future growth than on restructuring for compliance.

Why Tata Capital is Delaying its IPO

Possible reasons behind the delay include:

• Valuation Gap

Tata Capital was initially valued at ₹91,000 crore ($11 billion) and targets ₹17,450 crore in fundraising. In the unlisted market, shares traded at ₹1,000–₹1,050, while brokerages suggested ₹500–₹700 for listing. This 40–50% gap raised concerns about potential post-listing losses. Global brokerage firm Macquarie noted that even with a 60% discount, the stock’s price-to-book ratio is 6.4x, far above sector benchmarks.

• Regulatory Complexity

The board approved the integration of a major auto finance subsidiary, adding ₹30,230 crore in loans and 353 branches to the parent NBFC’s portfolio. The move aimed at meeting the listing mandate has led to a degradation in asset quality.

Following the merger, the gross non-performing asset (NPA) ratio rose to 3.2% in Q2FY25, compared to 2.4% before the integration. The increase was largely attributed to stress in the commercial vehicle and used-car loan segments.

Separately, Tata Capital filed an updated draft red herring prospectus (UDRHP) on 4 August 2025 with SEBI, which is currently under review.

• Market Saturation

Between July and September 2025, 37 IPOs were launched in India, raising more than ₹45,551 crore. However, the surge in equity supply led to subdued subscription levels in late-September issues, with retail participation falling to below 12% on average.

Consequences of Not Launching an IPO

If Tata Capital does not meet RBI requirements, it may be subjected to penalties, restrictions on business growth, prohibitions on raising capital, or governance instructions. RBI might impose supervisory action involving Tata Capital’s lending, Tier-I capital-raising, or expansion. Investor sentiment might be impacted, potentially influencing valuation and stakeholder confidence. Non-compliance with pre-listing disclosure norms might attract regulatory focus or court cases. Though penalties are not specifically quantified, business constraints and reputational damage may be large for this flagship Tata Group NBFC.

Conclusion

With ambiguity in the launch of Tata Capital IPO, stock market participants may face short-term volatility in related financial stocks, while institutional investors could reassess exposure to Tata Group entities. Traders should monitor regulatory updates, market sentiment, and valuation signals closely before making decisions.

Long-term investors may consider using this period to evaluate the company’s fundamentals, asset quality, and strategic direction, ensuring investment choices align with risk tolerance and portfolio goals. Staying informed and cautious will be key until the IPO’s timeline and pricing are clarified.

Sources

Inventiva
Tata Capital
IPO Central
IPO Central
Mint
The Hindu Businessline
The Hindu Businessline