Tata Capital Housing Finance approves ₹650.02 crore rights issue exclusively for parent Tata Capital, announced on February 25, 2026, to fuel growth in one of India's top-performing housing finance companies amid robust AUM expansion and healthy asset quality.

Rights Issue – Key Details

Parameter	Details
Issuer	Tata Capital Housing Finance Ltd (TCHFL)
Issue Size	₹650.02 crore
Equity Shares	Face value ₹10 each
Subscriber	100% to Tata Capital Ltd (parent company)
Structure	Rights issue in one or more tranches
Board Approval	February 25, 2026
TCHFL AUM	₹81,600 crore (+30% YoY)
Recent Performance	PAT +25% YoY, Cost-to-Income 31.8%, Net NPA 0.4%

Strategic context: TCHFL delivered stable 2.4% ROA across FY26 quarters, positioning as top HFC performer per MD Rajiv Sabharwal.cnbctv18+1

Why This Rights Issue Matters :-

Tata Capital Group Performance (Q3 FY26)

Metric	Tata Capital	TCHFL
Net Profit	₹790 Cr (+19.7% QoQ)	+25% YoY
AUM Growth	₹2,34,114 Cr (+26% YoY)	₹81,600 Cr (+30% YoY)
NII Growth	+44% QoQ to ₹2,541 Cr	-
Gross NPA	1.6%	Credit cost 0.1%
Net NPA	0.6%	0.4%

TCHFL highlights:

• Cost-to-income improved 114 bps to 31.8% Q3 FY26
• Stable ROA 2.4% all quarters FY26
• Unsecured retail disbursements resuming post prudent moderation

Strategic Purpose of ₹650 Cr Infusion

1. Accelerate AUM growth: Housing finance growing faster than group average (30% vs 26%)

2. Maintain leverage: Capital strengthens Tier-1 for regulatory comfort
3. Market share gains: Top HFC positioning requires scale + distribution
4. Digital/GenAI: Fund tech upgrades mentioned by CEO Rajiv Sabharwal

Parent commitment: Tata Capital's wholly-owned subsidiary gets full backing – no dilution for minority shareholders (none exist).

Tata Capital Stock Reaction

Shares closed down 0.96% at ₹334.15 despite strong Q3 numbers, as rights issue signals further equity raise post recent IPO:

Period	Tata Capital Performance
1 Week	-6%
1 Month	-5%
YTD	-2%
52W High	₹367.30 (Jan 20, 2026)

Market cap: ₹1.42 lakh crore as of Feb 25, 2026.

Strengths of TCHFL Rights Issue

• Top HFC performer: 2.4% ROA, 0.4% net NPA, 30% AUM growth.
• Parent fully backs: Tata Capital 100% subscriber – strong confidence signal.
• No minority dilution: Wholly-owned subsidiary maintains control.
• Strategic growth timing: Housing finance sector tailwinds + digital push.
• Asset quality excellence: Credit cost 0.1%, cost-income 31.8%.
• Scale advantage: ₹81,600 Cr AUM positions for market share gains.

Risks & Considerations

• Parent equity dilution: Tata Capital issues fresh shares to fund TCHFL.
• Stock overhang: Recent IPO + rights issue → supply pressure perception.
• Housing finance competition: HDFC, LICHFL, PNB Housing gaining share.
• Interest rate sensitivity: Leverage + NIM pressure if rates rise.
• Unsecured retail risk: CEO noted earlier moderation resuming.

FAQs

1. What is the size and structure of TCHFL rights issue?
₹650.02 crore via equity shares of ₹10 each, 100% subscribed by parent Tata Capital in one or more tranches.business-standard+1

2. When was the rights issue approved?
TCHFL Board approved February 25, 2026; Tata Capital received intimation same day.ndtvprofit+1

3. How did TCHFL perform in recent quarters?
AUM +30% YoY to ₹81,600 Cr, PAT +25%, stable 2.4% ROA, net NPA 0.4%, cost-to-income 31.8%.cnbctv18+1

4. Does this dilute minority shareholders?
No – TCHFL is 100% Tata Capital subsidiary; rights issue maintains ownership structure.

5. Impact on Tata Capital stock price?
Shares fell 0.96% to ₹334.15 despite strong Q3; market factoring equity raise overhang post recent IPO.

6. Why is Tata Capital investing ₹650 Cr now?
To fuel faster AUM growth (30%+), strengthen Tier-1 capital, fund digital/GenAI initiatives, capture housing finance market share.

7. Is TCHFL's asset quality stable?
Excellent – credit cost 0.1%, net NPA 0.4%, cost-income improved 114 bps to 31.8% Q3 FY26.