The financial service arm of Tata Group, Tata Capital Limited is going to foray into the private equity (PE) business by the end of first quarter of the next fiscal.

Tata Capital Managing Director and CEO Praveen P Kadle said, "We will be launching our private equity business by the end of first quarter of the next financial year."

The new venture is going to receive its funds from Tata Capital itself and third-party investments. The firm is also in discussions with the domestic as well as international players for the same. "The first round of funding by the PE firm will be around $350-$500 million....the fund will invest across all sectors," said Tata Capital Head of Investment Banking, J Niranjan.

Tata Capital also announced that this new venture will be headed by the former Managing Director and CEO of Centurion Bank of Punjab, Shailendra Bhandari. He has also held esteemed positions in Citibank, HDFC Bank and ICICI Prudential Asset Management Company.

Initially the PE business is going consider the non-listed companies in the Tata network and later look at the divestment opportunities, informed Mr Kadle.

Over-subscription of up to Rs 1,000 crore is allowed to be retained on the issue. Tata Capital is going to raise Rs 500 crore through a debenture issue.

The firm also likely to start its home loan business by the end of the current fiscal in March 2009. It is just waiting for a green signal from the housing regulator, National Housing Bank (NHB).

Mr. Kadle said, "We have applied to the National Housing Bank (NHB) and are awaiting its clearance. If we get the approval we will launch the home loan business by March.