IPO-bound Tata Capital bets on green energy financing

Tata Capital Ltd, set to launch its IPO next week, has identified green financing and digital innovation as its core growth pillars, backed by the merger of its IFC-backed subsidiary Tata Cleantech Capital in 2024.

IMAGE: Saurabh Agrawal, Chairman of Tata Capital Limited, and Rajiv Sabharwal, Managing Director and Chief Executive Officer. Photograph: Francis Mascarenhas/Reuters

By FY25, the cleantech and infrastructure finance book reached Rs 18,000 crore, growing at a 31.8 per cent CAGR over the last two years, the NBFC said on Friday.

“Over the last decade, the cleantech portfolio has financed over 500 renewable projects and sanctioned more than 22,400 MW of capacity across solar, wind, biomass, small hydro, among others,” MD and CEO Rajiv Sabharwal said.

“The cleantech segment combines rapid growth with high-quality, secured assets, underpinned by technology-driven monitoring and disciplined underwriting.

“The portfolio is among the cleanest in the NBFC space, positioning the company as a key mobilizer of global climate capital,” he said.

The Tata Group NBFC said it is building for the long term with a vision anchored on trust, customer-centricity, and responsible partnership.

Leveraging the Tata brand, it aims to become a financial leader while ensuring stability across cycles.

Speaking about growth outlook, Sabharwal said, “India’s high growth pace and relatively low credit penetration offer strong expansion potential.

“NBFCs, with their nimbleness in technology adoption and branch rollouts, are outpacing overall credit growth.

“Its loan book has accelerated, led by housing (one-third of growth), consumer lending, and SMEs – the backbone of the economy.”

The company stated it underscored its granular loan book, low unsecured exposure, and multi-product strategy to balance growth and risk.

However, post the Tata Motors Finance acquisition, net NPA stands at 1 per cent, while excluding it, the figure is 0.6 per cent.

Capital adequacy is expected at 22 per cent post-IPO, Tata Capital CFO Rakesh Bhatia said.

Chief Operating Officer Abonty Banerjee said the company has deployed GenAI in underwriting for working capital loans, which it said has dramatically reduced turnaround time for credit appraisal memos.

With India’s 2070 net-zero target offering a massive runway for green financing, Tata Capital said it is uniquely placed to support the country’s energy transition while presenting a strong investment case to IPO investors.

The IPO will open on October 6 with a price band of Rs 310-Rs 326 per equity share and a minimum lot size of 46 shares. The company aims to raise over Rs 15,500 crore from the issue.