The Reserve Bank of India (RBI) has approved Tata Capital Limited's (TCL) conversion from a non-banking finance company (NBFC)-core investment company (CIC) to an NBFC-investment credit company (ICC). This follows TCL's merger with Tata Cleantech Capital and Tata Capital Financial Services. The change signifies Tata Capital's transformation into an operating company, paving the way for its potential listing. Previously, it functioned as a holding company under the CIC structure. TCL had earlier announced the merger of Tata Motors Finance Ltd with itself, effective April 1, expected to be completed within 9-12 months. As a result, Tata Motors will hold a 4.7 per cent stake in the merged entity. The RBI had designated Tata Capital and its parent, Tata Sons Pvt, as NBFC-upper layer, requiring them to list by September next year. While Tata Sons has eliminated its net debt, Tata Capital has consolidated its finance businesses and sought the RBI's approval for the certification change. TCL reported total assets of Rs 1.76 lakh crore, total income of Rs 8,630 crore, and a profit after tax of Rs 3,327 crore in FY24. The company has received the certificate of registration as an NBFC-ICC, indicating its compliance with guidelines. Tata Sons has infused Rs 6,097 crore into TCL over the last five financial years, highlighting the group's focus on retail lending. Meanwhile, the Reserve Bank of India is reportedly agreeable to a restructuring plan proposed by Tata Sons seeking a waiver for the mandatory listing of the holding company as it has already wiped out debts.
