Tata Capital’s Mega $2 Billion IPO: IFC in Line for Multibagger Gains

The International Finance Corporation (IFC), a member of the World Bank Group, is poised to make a significant profit from its stake in Tata Capital's upcoming $2 billion IPO, as per news reports. IFC's initial investment in Tata Capital's cleantech venture back in 2011 is set to deliver multibagger returns as part of a larger offering aimed at boosting lending growth in India.

IFC's Early Bet on Tata Capital’s Cleantech Business

In 2011, IFC partnered with Tata Capital to establish Tata Cleantech Capital Ltd (TCCL), which focused on financing renewable and sustainable energy projects. Back then, India’s clean energy sector was in its infancy, heavily reliant on subsidies. 

However, over the years, TCCL has become a leading financier in the green sector, funding over 500 projects across solar, wind, biomass, small hydro, and electric mobility. By FY25, its loan book for cleantech and infrastructure projects crossed ₹18,000 crore, growing at a compound annual growth rate (CAGR) of nearly 32%, as per draft papers.

IFC's Impressive Gains from Tata Capital IPO

As part of Tata Capital's IPO, IFC plans to offload 3.58 crore shares, reducing its stake in the parent non-banking financial company (NBFC). 

The World Bank affiliate initially invested in Tata Capital at an adjusted price of around ₹25 per share, which valued its stake at approximately ₹179 crore. At the current rights issue price of ₹343 per share, IFC's stake is now worth roughly ₹2,458 crore, marking a profit of nearly ₹2,278 crore. This translates to an impressive return of around 13 times its initial investment. Additionally, the IPO price is expected to be even higher, potentially increasing IFC's returns further.

Tata Capital IPO Overview and Future Prospects

Tata Capital's $2 billion IPO is expected to launch in the first half of October 2025, following an extension granted by the Reserve Bank of India (RBI) to list on stock exchanges, as per news reports. 

The offering will include both a fresh issue of up to 21 crore shares and an offer for sale (OFS) of 26.58 crore shares, with 3.58 crore shares coming from IFC. If successful, this IPO will be the largest public offering in India's financial sector, following the recent listing of Tata Technologies in November 2023.

Read More: SEBI Proposes Changes to Minimum Public Shareholding Norms for Large IPOs!

Conclusion

The upcoming IPO of Tata Capital represents a major milestone for the company and IFC, both of which have significantly benefited from the growing demand for green financing in India. IFC's multibagger gains from its 2011 investment highlight the strong performance of Tata Capital's cleantech ventures, which have helped fuel the country’s transition to renewable energy.

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