Tata Capital Targets Doubling Loan Book in 3 Years; Aims to Cut Credit Cost Below 1%

Tata Capital has unveiled an ambitious roadmap to double its existing loan book of ₹2.3 lakh crore within 3 years and bring down credit costs to under 1% as per the news report. With a strong focus on SME lending, the company aims to harness economic momentum and recent capital infusion post-IPO to fuel this expansion.

Rapid Loan Book Expansion Plans Backed by Robust Growth

On October 13, 2025, Tata Capital's CEO Rajiv Sabharwal shared the non-bank lender's vision to more than double its loan book by 2028. Currently standing at ₹2.3 lakh crore, the company added ₹50,000 crore in just the past year. Compared to the initial 10 years it took to reach its first ₹50,000 crore, this marks a significant acceleration, suggesting a well-supported and scalable business model.

Credit Costs to Drop Below 1% Soon

Post the merger with Tata Motors Finance in May 2025, credit costs rose slightly to 1.4%. However, Tata Capital remains confident of reducing this below 1% shortly. Historically, credit costs have been maintained under 1%, reflecting the company’s strong risk management and portfolio quality, particularly in SME segments, which now constitute over 26% of AUM.

Read More: Tata Capital Share Price Rises 1% on Listing Day!

Strong Foundation from IPO and Strategic Lending Focus

The IPO proceeds will support operational funding needs for over 2.5 years. According to the company, nearly all loans originated internally with minimal reliance on co-lending. Tata Capital believes this strategy offers tighter control and more efficient lending outcomes. In addition, its diversified portfolio and robust digital strategy are expected to shield the net interest margins from fluctuations in interest rates.

Robust Economic Environment Aiding Expansion

Chairman Saurabh Agrawal noted that with India poised to double its total credit outstanding to ₹500 lakh crore over the next 5 years, Tata Capital is well placed to capitalise. Economic measures, including GST rationalisation, income tax reliefs, and RBI’s rate cuts, have boosted domestic demand, giving further impetus to the credit market environment.

Tata Capital Share Price Performance

On October 13, 2025, Tata Capital share price opened at ₹330.00 on NSE, above the listing price of ₹326.00. During the day, it surged to ₹333.00 and dipped to ₹326.25.00. The stock is trading at ₹330.50 as of 3:23 PM. The stock registered a moderate gain of 1.21%.

Conclusion

Tata Capital’s plan to double its ₹2.3 lakh crore loan book by 2028 while cutting credit costs under 1% signals a confident and aggressive expansion strategy. With a heavy focus on SME lending, internal sourcing, and digital adoption, the firm is positioning itself to leverage India’s growing credit landscape effectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.