Tata Capital Is Said to Seek Much Higher IPO Valuation Target

Tata Capital Ltd. is seeking a valuation of $18 billion to $20 billion in its planned initial public offering and could file an updated draft red herring prospectus as soon as this week, people familiar with the matter said.

The valuation is much higher than an earlier target of about $11 billion, with the Tata Group unit buoyed by a recent rights issue and the success of other IPOs in India, including by fellow shadow lender, HDB Financial Services Ltd., the people said. HDB attracted strong demand and raised about $1.5 billion.

Tata Capital aims to raise about $2.2 ...