Tata Capital IPO Day 3: Rs 15,512 crore IPO moves ahead on final day. Check GMP and other important details

Tata Capital’s Rs 15,512 crore initial public offering (IPO) was fully subscribed on the third and final day of the bidding. The IPO recorded a total subscription of 1.01 times, with investors bidding for shares of Rs 33.64 crore against the offered shares of Rs 33.34 crore. Demand was largely driven by Qualified Institutional Buyers (QIBs) and Non-Institutional Investors (NIIs).

Despite full subscription, the gray market premium (GMP) remains moderate and hovers around 1.8% above the issue price, indicating moderate listing expectations. The IPO includes a fresh issue of Rs 6,846 crore and an offer for sale (OFS) of Rs 8,666 crore by promoter Tata Sons, which currently holds 95.6% stake in the company.

Tata Capital IPO Subscription Update

As of 11:50 a.m. on Day 3, the IPO had been subscribed a total of 1.01 times, indicating that demand slightly exceeded the total number of shares on offer.

Retail Individual Investors (RIIs): This segment, for investors who bid up to Rs 2 lakh, subscribed to 84% of the 16.61 crore shares allotted to them. The undersubscription indicates subdued interest among retail investors, possibly due to subdued GMP or general market sentiment.

Non-Institutional Investors (NIIs): High net worth individuals (HNIs) and corporates have subscribed 1.2 times their equity allocation of Rs 7.11 crore, reflecting healthy interest from wealthier, risk-tolerant investors.

Qualified Institutional Buyers (QIBs): This segment consists of mutual funds, insurance companies and foreign institutional investors and has also subscribed 1.2 times their quota of 9.49 crore shares, which is a sign of institutional confidence in Tata Capital, though not overly optimistic.

Tata Capital IPO GMP today:

The GMP remains modest and trades around Rs 6-8 above the issue price of Rs 326 per share, indicating a likely listing price near Rs 332 – a marginal premium of around 1.8%. The subdued GMP indicates a cautious gray market outlook, suggesting that significant listing gains may not be assured at this stage.

Robust investor response

Ahead of the IPO, Tata Capital raised Rs 4,642 crore from major investors, attracting strong interest from both domestic and global institutions. India’s Life Insurance Corporation (LIC) emerged as the largest anchor, with 2.15 crore shares worth nearly Rs 700 crore.

Significant allocations were also made to leading mutual funds and asset managers including ICICI Prudential, HDFC Mutual Fund, Aditya Birla Sun Life, DSP, Axis, Kotak and Nippon Life AMC. Internationally, major investors included Morgan Stanley, Goldman Sachs, Nomura and the Norwegian sovereign wealth fund, the Government Pension Fund Global.

Tata Capital IPO: Price range, key dates and company overview

IPO price band and lot size: Tata Capital has set its IPO price band between Rs 310 and Rs 326 per share. The minimum application requires a lot of 46 shares, which works out to Rs 14,996 at the upper price limit.

Allotment and Listing Dates: The allotment basis is expected to be completed on October 9, with the shares expected to list on the BSE and NSE on October 13.

In a major milestone in the Indian NBFC sector, Tata Capital, a wholly owned subsidiary of Tata Sons, serves as the core financial services arm of the Tata Group. The company offers a broad spectrum of financial solutions, including retail, SME and corporate lending, along with wealth management, investment banking and the distribution of third-party financial products. The company’s diverse portfolio makes it a major player in India’s financial services landscape.

As of June 2025, Tata Capital reported total assets of Rs 2.52 lakh crore and a gross loan portfolio of Rs 2.33 lakh crore, establishing its position as the third largest diversified non-banking financial company (NBFC) in India, after Bajaj Finance and Shriram Finance. With a gross non-performing asset (NPA) ratio of just 2.1% – one of the lowest in the industry – the company demonstrates strong asset quality. Its nationwide presence includes 1,516 branches across 27 states and union territories, enabling far-reaching customer access and service delivery.

Valuation and should you subscribe?

At the higher end of the price range, Tata Capital is valued at around 4.1 times FY25 book value and 33 times FY25 earnings, making it slightly below the average valuation of listed peers in the NBFC sector. This pricing strategy is seen as a fair entry point for long-term investors.

Market analysts believe that the IPO offers reasonable upside potential. Prashanth Tapse, Senior VP (Research) at Mehta Equities, commented: “Given the current market sentiment, Tata Capital management has wisely priced the IPO slightly below the industry average, leaving ample room for healthy stock market gains.”

Proceeds from the new issue will be used to strengthen Tata Capital’s Tier-I capital base, supporting future lending capacity and overall growth. Between FY23 and FY25, the company saw revenues rise 56%, while profit after tax rose 10% to Rs 3,655 crore, reflecting steady operational performance.

Backed by a strong balance sheet, a well-diversified loan portfolio and the confidence associated with the Tata Group, most brokerages have given the IPO a ‘Subscribe’ rating, especially for long-term investors. Many are now looking to see whether Tata Capital can match the strong stock market success of last year’s IPO of Tata Technologies.

Broker’s visions

Aditya Birla Money: “At the higher price range, the IPO is valued at 4.5x P/B (pre-issue) and 4.1x (post-issue) based on FY25 book value. We recommend a ‘SUBSCRIPTION for the long term’ approach.”

Anand Rathi research: “Tata Capital is trading at a price-to-earnings of 32.3x and a price-to-earnings ratio of 3.5x as per FY25 estimates, with a post-issue market capitalization of Rs 13,83,827 million. The issue is fairly valued and we advise investors to subscribe – for the long term.”

Canara Bank Securities: “The IPO, valued at 4x FY25 P/B, is in line with peers. Integration with Tata Motors Finance, AAA credit ratings and a strong financing profile provide long-term benefits. While risks include regulatory shifts and interest rate volatility, Indian economic growth and digital trends support a positive outlook. We recommend a ‘Subscribe – Long Term’ Attitude.”

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)