Tata Capital, a subsidiary of Tata Sons, is seeking to raise Rs 10,000 crore through borrowing to fund its lending business. The board of directors of Tata Capital Financial Services has approved the merger of Tata Capital Financial Services and Tata Cleantech Capital. The latter is a subsidiary of TCL and an 80.5% stake owned by Tata Capital.
Tata Capital plans to raise funds through EBT fundraising in the current quarter to expand the balance sheet of the merged entity. The bank focuses on retail loans, particularly home and personal loans.
Tata Capital, a leading Non-bank financial institution (NBFC) in India, has recently been classified by the Reserve Bank of India (RBI) as an upper-layer NBFC. As per the RBI regulations, Tata Capital must list itself on the stock exchange within the next two years. When reached for a statement, a Tata Capital spokesperson declined to comment on the matter.
Interestingly, Tata Motors has a sprawling financial services business called Tata Motors Finance, which provides vehicle and dealer financing loans. Analysts expect Tata Sons to continue providing equity support to maintain a comfortable capitalisation and liquidity profile due to the importance of the financial services business to the Tata Group and Tata Sons' plan to keep TCL adequately capitalised.
Tata Motors has a financial services arm called Tata Motors Finance that provides loans for vehicles and dealer financing. Analysts predict that Tata Sons will continue to provide equity support to maintain a comfortable capitalisation and liquidity profile for TCL.
Overview
Tata Capital Limited ("TCL"), a subsidiary of Tata Sons Private Limited, is a prominent financial services company that invests in diverse industries through its subsidiaries. TCL is subject to strict regulatory oversight as a systemically important non-deposit-accepting Core Investment Company (CIC) registered with the Reserve Bank of India (RBI). This ensures that TCL unlisted shares operate safely, reasonably, and transparently, providing its clients with the highest benefit and security. With its solid reputation and commitment to excellence, TCL is a trusted partner for individuals and businesses seeking reliable financial solutions.
Industry Outlook
India's financial services sector accounts for 6% of the country's GDP and is expanding rapidly. It includes commercial banks, development finance institutions, non-banking financial companies, insurance companies, cooperatives, mutual funds, and payment banks. Financial institutions dominate the market share with over 60%. Non-banking finance companies offer loans, purchase stocks and debentures, and provide leasing, hire-purchase, and insurance services. Insurance companies operate in both the public and private sectors, regulated by the Insurance Regulatory and Development Authority. Financial sector reforms were initiated in 1991 to increase economic growth and foreign direct investment, reducing direct government control and improving resource mobilisation and allocation. Prudential standards have been tightened, and transparency and regulation increased to avoid systemic collapse.
Performance Of Tata Capital Unlisted Shares in FY 21-22
Tata Capital Limited registered as a Core Investment Company with RBI, invests in subsidiaries mainly in lending and offering a wide range of financial services and products.
Its three main subsidiaries engaged in the lending business are Tata Capital Finance Services Limited, Tata Capital Housing Finance Limited, and Tata Cleantech Chemical Limited.
Tata Capital expanded its Net Interest Margin (NIM), focused on managing operating costs and tightening Credit policies to report the highest profit during FY22.
PAT increased to INR 1,801 Crore from INR 1,245 Crore. So, the Consolidated Net Interest Income and additional income for the year is INR 5,364 crore, an increase of 12% from FY21.
NPA decreased from 0.9% in FY21 to 0.6% in FY22. Return on Equity increased from 12.4% in FY 2020-21 to 15.3% in FY 2021-22.
Total loan Book stood at INR 90,121 Crore as of March 31st, 2022, up by 22%. Further, the book value has climbed from 28.79 to 33.82.
Potential Benefits Of Investing In Tata Capital Unlisted Shares
Investors can invest in pre-public companies for early access to high-growth opportunities.
Investors who hold onto unlisted shares for longer periods may see greater returns due to reduced market fluctuations.
Unlisted shares may offer higher dividends as companies have more flexibility in profit distribution due to a lack of regulations.
Investing in unlisted shares diversifies your portfolio, reducing overall risk and supporting innovative companies and entrepreneurs.
Final Words
Unlisted stocks can turn out to be that hidden gem if you can pick the right one. The most important factors to consider when choosing unlisted stocks are the fundamentals of the companies and the intermediary through which you will buy the stocks. Therefore, Tata Capital's unlisted shares are the best option to invest in for investors. Also, for investors who are new and seeking to invest this is the best option for them, as without any doubt it will only give benefit.
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