Highlights: Can Tata Capital IPO deliver listing suprise? GMP picks up again ahead of listing

Refunds for unallotted investors were processed on October 10, while successful bidders received shares in their demat accounts the same day. With the stock set to list on October 13, all eyes will be on its debut performance.

Tata Capital Limited, part of the Tata Group, is one of India’s leading non-banking financial companies (NBFCs). It provides a wide range of financial products – from personal, business, and home loans to wealth management, infrastructure finance, and vehicle loans. With more than 500 branches across the country and the backing of Tata Sons, the company has built a strong position in India’s retail and SME lending space.

The last GMP for Tata Capital IPO is Rs 6.5, as of the latest update on October 9th, 2025, at 09:02 PM. With a price band of Rs 326.00, the estimated listing price of the Tata Capital IPO is Rs 332.5.

Tata Capital has reported strong growth in recent years. For FY25, the company recorded a total income of Rs 28,370 crore, up about 56% year-on-year, and a profit after tax (PAT) of Rs 3,655 crore. Its net worth stood at Rs 32,588 crore. The company’s financial indicators remain stable, with a gross NPA of around 1% and a return on equity (RoE) exceeding 20%.

Tata Capital’s branch network forms a key pillar of its market expansion strategy, with a pan-India presence across location tiers, regions, and customer segments. As of June 2025, the company operated 1,516 branches across India, of which 1,508 were leased and 8 were owned. Regionally, 42% of branches were in the South, 23% in the North, 19% in the East, and 16% in the West.

Tata Capital operates in both lending and non-lending segments. The lending business, which accounts for 97% of total income, includes loans to retail, SME, and corporate customers. The non-lending segment (3% of income) covers distribution of third-party products (insurance, credit cards), wealth management services, and sponsorship/management of PE funds.

Tata Capital’s business strategy is to continue the growth trajectory by enhancing the product offerings and strengthening the distribution network. The company is strengthening the risk management framework, credit underwriting, and collections infrastructure to maintain high asset quality. Plus, it is leveraging technology and data analytics to drive efficiency, lower costs, enhance customer experience, and strengthen risk management.

The company’s interest income grew strongly from Rs 11,910.9 crore in FY23 to Rs 25,719.8 crore in FY25, registering a CAGR of 47%, driven by an expansion in the gross loan book from Rs 1,20,196.9 crore to Rs 2,26,553 crore (CAGR of 37.3%). Tata Capital’s net profit increased from Rs 2,945.8 crore in FY23 to Rs 3,655 crore in FY25, reflecting a CAGR of 11.4%.

The big growth drivers as per Deven Choksey Research, “the Company is one the leading Indian diversified NBFC, catering to

range of customers spanning across diverse end-sectors.

Being a Tata Group Company, it has easy access to borrowing at a lower cost of capital, while it has entrenched trust of its existing and prospective customers in the brand and business ethics.”

They added that the company offers a range of financial products both in lending and non-lending businesses through its large network of 1,500+ offline branches and integrated digital platform encompassing a website, mobile app, and WhatsApp chatbot for end-to-end loan processing, customer onboarding, and self-service.

The grey market premium (GMP) for Tata Capital’s IPO stood at Rs 6.5. Based on the upper end of the price band at Rs 326, the IPO is projected to debut around Rs 332.5 per share. This translates into an estimated listing gain of about 1.99% for investors.

Tata Capital’s business strategy is to continue the growth trajectory by enhancing the product offerings and strengthening the distribution network. The company is strengthening the risk management framework, credit underwriting, and collections infrastructure to maintain high asset quality. Plus, it is leveraging technology and data analytics to drive efficiency, lower costs, enhance customer experience, and strengthen risk management.

Post-merger, as of March 2025, Tata Motors Finance contributed 92.5% of Commercial Vehicle Loans, 16.8% of Car Loans, and 12.8% of Supply Chain Finance to TCL’s gross loans. This integrated product offering positions TCL to address the entire auto financing market, valued at Rs 18.4 lakh crore (CRISIL Report). Tata Motors Finance’s pan-India network of 353 branches across 27 States and UTs further enhances Tata Capital’s positioning as a leading full-spectrum auto finance provider.

The company’s interest income grew strongly from Rs 11,910.9 crore in FY23 to Rs 25,719.8 crore in FY25, registering a CAGR of 47%, driven by an expansion in the gross loan book from Rs 1,20,196.9 crore to Rs 2,26,553 crore (CAGR of 37.3%). Tata Capital’s net profit increased from Rs 2,945.8 crore in FY23 to Rs 3,655 crore in FY25, reflecting a CAGR of 11.4%.

Tata Capital operates in both lending and non-lending segments. The lending business, which accounts for 97% of total income, includes loans to retail, SME, and corporate customers. The non-lending segment (3% of income) covers distribution of third-party products (insurance, credit cards), wealth management services, and sponsorship/management of PE funds.

Tata Capital’s branch network forms a key pillar of its market expansion strategy, with a pan-India presence across location tiers, regions, and customer segments. As of June 2025, the company operated 1,516 branches across India, of which 1,508 were leased and 8 were owned. Regionally, 42% of branches were in the South, 23% in the North, 19% in the East, and 16% in the West.

At the upper price band, the issue is valued at an adjusted price-to-book value of 3.6x, broadly in line with peers, making it fully priced. The company has reported steady growth in interest income on the back of loan book expansion and widening branch network across India. However, its RoE and RoA remain lower than peers, which is a concern. “Backed by a strong brand and the proposed merger with Tata Motors Finance that will enhance its customer base, the company is well-positioned for long-term growth. However, considering the near term operational challenges, we assign a ‘Subscribe for Long Term’ rating to the issue,” said Choice Broking in an IPO note.

Investors who applied for the Tata Capital IPO can check their allotment status on the registrar’s website, MUFG Intime India Pvt Ltd, or on the stock exchange platforms. Refunds and share credit to successful bidders’ Demat accounts will begin on October 10. The company’s shares are scheduled to list on October 13 on both the NSE and BSE.

Tata Capital has reported strong growth in recent years. For FY25, the company recorded a total income of Rs 28,370 crore, up about 56% year-on-year, and a profit after tax (PAT) of Rs 3,655 crore. Its net worth stood at Rs 32,588 crore. The company’s financial indicators remain stable, with a gross NPA of around 1% and a return on equity (RoE) exceeding 20%.

The three-day bidding window for the IPO opened on October 6 and closed on October 8. The share allotment is being finalised today, October 9. Refunds and credit of shares to Demat accounts will be processed on October 10, and the listing is scheduled for October 13 on both the NSE and BSE.

Tata Capital is prudent to general slowdown in the global economic activities. Its business may be adversely affected by seasonal trends in the Indian economy. Plus, the company’s financial performance is sensitive to interest rate fluctuations as it may raise borrowing costs. The company operates under strict regulations governing India’s financial services industry.

Overall yield for the retail segments increased in FY23 due to the interest rates hikes. However, the amount of pass on has been distinct across all segments on account of level of competition, nature of asset class and segmental credit demand. Accordingly, a stable or modest increase in RoA was seen across all segments in FY24.

Tata Capital fixed the IPO price band between Rs 310 to Rs 326 per share. For retail investors, the minimum bid size was one lot consisting of 46 shares, translating to an investment of Rs 14,996 at the upper end of the price band.

The company operates a pan-India network of 1,516 branches across 27 states and union territories, making it easily accessible to a wide range of customers across urban and semi-urban areas.

Here’s a simple step-by-step guide to check your Tata Capital IPO allotment online-

– Visit the MUFG Intime IPO allotment page.

– Select Tata Capital IPO from the issue list.

– Enter your PAN and Application Number.

– Complete the security verification.

– Click Search to check if shares have been allotted.

Tata Capital’s branches are supported by an extensive network of external channels comprising over 30,000 DSAs, over 400 OEMs, over 8,000 dealers and over 60 digital sourcing partners with whom they had partnered, as of June 2025. The company offer their partners API integration with their IT systems, enabling them to directly source customer information from their partners’ IT interfaces and enabling their partners to seamlessly onboard customers. This functionality allows their partners to act as a force multiplier and function as an extension of their branch network to reach underpenetrated markets in an asset-light manner.

Here’s a simple step-by-step guide to check your Tata Capital IPO allotment online-

– Go to the NSE IPO allotment status page.

– Select ‘Tata Capital IPO’ from the list of active IPOs.

– Enter your PAN or Application Number.

– Complete the captcha verification.

– Click Submit to view your allotment status.

Here’s a simple step-by-step guide to check your Tata Capital IPO allotment online-

– Visit the BSE IPO allotment status page.

– Select ‘Equity’ as the issue type.

– Choose ‘Tata Capital IPO’ from the dropdown menu.

– Enter your Application Number or PAN.

– Complete the captcha by ticking “I’m not a robot”.

– Click Search to view your allotment status.

Around 80% of loans are secured, and organic growth accounts for over 99% of total loans. This indicates sustainable growth without heavy reliance on acquisitions or high-risk lending.

The total size of the Tata Capital IPO stands at Rs 15,511.87 crore. The offer includes a fresh issue of Rs 6,846 crore, comprising 21 crore new shares, and an offer for sale (OFS) worth Rs 8,665.87 crore, involving 26.58 crore shares. The OFS was made by the company’s promoters – Tata Sons and International Finance Corporation (IFC).

By combining the benefits of physical and digital channels, phygital networks enable lenders to reach a wider audience, increase operational efficiency, and reduce costs. Physical touchpoints, such as branches, provide a human interface for customers who require guidance and support, while digital channels facilitate seamless onboarding, loan processing, and disbursal. This hybrid approach allows lenders to leverage the strengths of each, ensuring a more efficient and effective distribution of loan products.