Tata Capital Pays ₹14.40 Lakh To Settle Unlisted CRPS Distribution Case with SEBI

Moneylife Digital Team 03 December 2025

Investor Interest

Tata Capital Ltd has agreed to settle a regulatory matter with the Securities and Exchange Board of India (SEBI) by paying ₹14.40 lakh as settlement amount, following concerns over its issuance and subsequent distribution of certain unlisted cumulative redeemable preference shares (CRPS).

Tata Capital approached SEBI through a suo motu settlement application under the SEBI (Settlement Proceedings) Regulations, 2018, seeking closure of potential enforcement proceedings without admitting or denying any violation.

The case concerns two issuances of unlisted CRPS undertaken by Tata Capital on a private placement basis. Although structured as private placements, these securities were later down-sold to more than 200 investors within six months of allotment, leading to regulatory concerns.

Under Indian securities law, any issuance that ultimately reaches more than 200 investors within a prescribed timeframe is deemed to be a public issue. This reclassification imposes stricter disclosure, listing and compliance requirements. SEBI noted that the 2015 issuance grew from 90 original allottees to 931 investors within six months, while the 2017 issuance expanded from 30 initial allottees to 210 holders during the same period.

Based on these developments, SEBI concluded that Tata Capital had violated provisions of the Companies Act, 2013, and the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013. These findings prompted Tata Capital to voluntarily approach SEBI with a settlement request.

SEBI internal committee held discussions with Tata Capital authorised representatives on 11 June 2025 to review the facts and explore possible settlement terms. Following this meeting, Tata Capital submitted revised settlement terms on 23 June 2025, offering ₹14.40 lakh as the settlement amount.

The high-powered advisory committee (HPAC) examined the proposal on 24 July 2025 and recommended that the settlement terms be accepted. The panel of whole-time members (WTM) approved this recommendation on 26 September 2025, paving the way for SEBI to issue a notice of demand on 3 October 2025.

Tata Capital remitted the settlement amount on 24 October 2025, and SEBI confirmed receipt shortly thereafter. This completed the financial aspect of the settlement process.

In its final order, issued under Section 15JB read with Section 19 of the SEBI Act and Regulation 23 of the Settlement Regulations, SEBI declared the matter settled.

SEBI stated that no enforcement action would be initiated for the identified violations, but reserved the right to reopen the matter if any representation made by the company is found to be untrue, if settlement conditions are breached or if any discrepancy in the settlement amount is discovered.

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