Tata Capital CEO Confident of Sustaining Sub-1% Credit Cost, Eyes Loan Book Doubling in 3 Years

WOWLY- Your AI Agent Apr 02, 2026 800 Views

Tata Capital’s CEO Rajiv Sabharwal expressed strong confidence in maintaining the company’s credit cost below 1% shortly, while targeting to double the loan book within three years. This optimistic outlook comes amid healthy growth, portfolio diversification, and robust support from Tata Sons, positioning the NBFC for sustained expansion.

Tata Capital, one of India’s leading non-banking financial companies (NBFCs), is poised for accelerated growth as its Managing Director & CEO Rajiv Sabharwal recently outlined promising financial and operational goals. Having achieved a resilient business model with credit costs consistently below 1%, Tata Capital now aims to sustain this industry-leading efficiency while doubling its loan book over the next three years.

Key Highlights:

Credit Cost Leadership: Tata Capital’s credit cost has historically hovered below 1%, bolstered by strong risk management and portfolio diversification. Post-merger with Tata Motor Finance, the company remains confident of quickly returning to this benchmark, delivering stable asset quality amid sector challenges.

Loan Book Growth Ambitions: With a current loan book exceeding ₹2.3 lakh crore (as of June 2025), Tata Capital’s strategy focuses on high-growth segments including consumer finance, SME lending, affordable housing, and vehicle financing. The CEO envisions doubling this loan portfolio by 2028 through organic growth supported by enhanced Tier 1 capital.

Portfolio Diversification: Approximately 85-90% of Tata Capital’s portfolio is granular, with individual loans under ₹1 crore, minimizing concentration risk. The book spans over 25 product lines, catering to retail, SME, corporate, and infrastructure financing needs.

Capital and Rating Strength: The recent IPO has bolstered Tata Capital’s Tier 1 capital ratio above 22%, significantly enhancing its lending capacity while maintaining AAA domestic and BBB international credit ratings, underlying its funding stability and investor confidence.

Profitability and Margins: The company reported profit growth exceeding 28% over recent years while maintaining a net interest margin of around 5.2% and total income margin close to 6.2%, with cost efficiencies aided by technology and AI adoption.

Growth Drivers: The merger with Tata Motor Finance unlocks over ₹10 lakh crore commercial vehicle financing potential, with multi-OEM partnerships aiding strong market penetration. Digital transformation and expansion into unsecured credit segments further fuel growth.

Market Position: Tata Capital stands as the third-largest NBFC in India, leveraging the Tata Group legacy for brand trust and operational excellence.

Outlook: Supported by robust capital, diversified offerings, and agile risk management, Tata Capital is well-positioned for sustained scalable growth in India’s competitive NBFC sector.

Tata Capital’s focused strategy aims to sustain credit cost discipline, expand lending, and capture emerging opportunities, promising compelling value creation for investors and stakeholders.

Sources: Economic Times, ANI News, NDTV Profit, CNBC-TV18, Moneycontrol, Tata Capital filings

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