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Tata Capital’s Rs 15,500-crore initial public offering (IPO) saw strong momentum on its final day, with bids totalling 1.95 times the issue size. Qualified institutional buyers (QIBs) drove much of the demand. According to consolidated data from the NSE and BSE, investors placed bids for over 65 crore shares, against 33.34 crore shares on offer.
The public issue, which closed on Wednesday, 8 October, has emerged as the largest IPO of 2025 so far and the biggest since Hyundai Motor India’s listing last year.
Strong Institutional and Retail Interest
QIBs led the subscription, with their portion oversubscribed 3.42 times, driven by mutual funds and foreign institutional investors. Non-institutional investors (NII) bid 1.98 times, while retail investors subscribed 1.1 times. The employee quota also saw strong interest, at 2.92 times.
Earlier, on 3 October, the IPO raised Rs 4,642 crore from 135 anchor investors, including Life Insurance Corporation of India (LIC), Morgan Stanley, Goldman Sachs, Amansa Holdings, and several domestic mutual funds.
Offer Details and Valuation
Tata Capital offered 47.58 crore equity shares, which included a fresh issue of 21 crore shares and an offer-for-sale of 26.58 crore shares by promoter Tata Sons and investor International Finance Corporation (IFC).
The price band was set at Rs 310-326 per share, valuing the company at about Rs 1.38 lakh crore at the upper end. At this level, the stock is priced at roughly 3.4-4.1 times FY25 book value and 32-38 times earnings, broadly in line with other large diversified NBFCs.
Analyst Views
Brokerages are optimistic about Tata Capital’s long-term prospects but cautious on short-term returns. SBI Securities noted a dip in return ratios in FY25 due to losses from the TMFL merger but expects profitability to improve as the vehicle-finance subsidiary turns profitable.
ICICI Direct highlighted a drop in the provision-coverage ratio to 58.5 percent and an increase in average borrowing costs to 7.8 percent, which could pressure margins. Aditya Birla Money flagged gross Stage-3 loans of 2.1 percent and an unsecured loan share of around 20 percent, noting that any slippage could affect profitability and capital adequacy.
Despite these concerns, analysts point to Tata Capital’s strong capital base, AAA credit rating, and diversified retail and SME portfolio, which provide balance-sheet resilience. Brokerages such as Anand Rathi and Aditya Birla Capital have recommended a ‘Subscribe – Long Term’ approach for the issue.
Next Milestones
The IPO closed for subscription on October 8, with share allotment expected by October 9. Listing on the BSE and NSE is likely on October 13.
Proceeds from the fresh issue will strengthen Tata Capital’s Tier-I capital to support future lending growth, while funds from the offer-for-sale will go to Tata Sons and IFC.
