LIVE: Tata Capital IPO subscribed 0.24 times so far, GMP rises 3%; Check price band, and other details

“At the upper price band of Rs 326, the issue is valued at a P/BV multiple of 3.4x on post-issue capital. Tata Capital combines the strength of its Tata Group parentage, a diversified loan portfolio, robust risk management practices, and a pan-India omni-channel network to position itself as one of the most reliable and scalable NBFCs in India,” said SBI Securities in its IPO note.

“At the upper end of the issue price range, i.e. at INR 326, the share is valued at a 3.4x Jun25 BVPS on a post-issue capital basis. Post the merger with TMFL, the credit costs have increased (FY25 credit costs: ex. TMFL was 0.9% incl. TMFL the credit cost rose 1.4%) resulting in RoA declining (FY25 RoA: ex. TMFL at 2.1% vs. 1.8% incl. TMFL) and along with lower RoE (FY25 RoE: ex. TMFL at 14.2% vs. 12.6% incl. TMFL). Normalization of credit costs in the vehicle finance portfolio along with realization of business synergies would be key to achieving higher return ratios of c.15% RoEs—similar to peers like HDB Financial currently trading at 3.5x June 2025 BVPS,” said Antique stocks broking in its IPO note.

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The company has built a wide footprint with 1,516 branches across India. It also focuses on digital lending, claiming that 97% of its customer onboarding happens online.

“The company is committed to leverage technology and data analytics across the lending value chain to enhance efficiency, reduce costs, improve customer experience and manage risks. With a wide product portfolio covering retail, SME, housing, and corporate finance, as well as non-lending businesses such as wealth management and fund management, Tata Capital enjoys strong synergies within the Tata Group ecosystem and a diversified funding base. Investors may consider the IPO as a potential long-term investment opportunity,” said Master Capital Services in an IPO note.

In FY25, Tata Capital reported total income of Rs 28,369.87 crore and a profit after tax of Rs 3,655 crore. Its earnings per share stood at Rs 9.3. The company maintained a net NPA of 0.98%.

The Tata Capital IPO so far on Day 1 of bidding received an overall subscription of 0.19 times. Among categories, Qualified Institutional Buyers (QIBs) portion subscribed 0.29 times, while the retail portion was subscribed 0.17 times.

The Non-Institutional Investor (NII) segment received at 0.11 times so far. The bidding process is still underway.

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The Indian NBFC sector has emerged as one of the fastest-growing components of the financial system, expanding its AUM from Rs 23 lakh crore in FY19 to about Rs 48 lakh crore in FY25, registering a strong CAGR of 13.2% over six years. “Looking ahead, NBFC credit is projected to grow at a healthy 15-17% CAGR betweien FY25 & FY28, driven largely by retail, MSME, and corporate segments, with retail credit alone expected to maintain 14-16% CAGR during the same period,” said Master Capital Services in an IPO note.

The funds raised through the IPO will mainly be used to strengthen Tata Capital’s Tier-1 capital base. This will help the company meet the Reserve Bank of India’s regulatory requirements for large NBFCs and support its future growth in lending and other business areas.

Ahead of the IPO, Tata Capital raised Rs 4,642 crore from 135 anchor investors. The list includes well-known domestic and international names such as LIC, Morgan Stanley, Goldman Sachs, Amansa Holdings, and Norway’s sovereign wealth fund.

The company is part of the Tata Group’s financial arm and operates as a subsidiary of Tata Sons. Tata Sons holds about 88.6% of Tata Capital, while the International Finance Corporation (IFC) owns a small 1.8% stake, giving the company a mix of domestic and global institutional ownership.

Tata Capital has recently acquired Tata Motor Finance to build its presence in passenger and commercial vehicle financing. The Company aims to improve its market share through expanding its presence across Tier-2 cities and beyond, by deploying its phygital platform. Over FY23-25, it has been able to scale its loan book at 37% CAGR, while the NII and PPoP have witnessed a growth of 42% and 33.2% CAGR, driven by its omni-presence strategy.

“On valuation parse at the upper price band of Rs 326/-, the issue is asking for a market cap of Rs 1,38,383 cr. Based on FY 2026 annualised earnings and fully diluted post- IPO paid up capital, the company is asking for a PB of 3.2x which appears reasonably priced compare to ~4x average of its comparable listed peers, leaving healthy scope for decent listing gains and long-term value creation. With India’s rising credit penetration, formalisation of the economy, and increasing demand for consumer and business financing, we believe Tata Capital offers investors a credible and scalable proxy to participate in the broader NBFC growth cycle. Hence, looking at all attributes we recommend investors to “SUBSCRIBE” the Tata Capital Ltd IPO for Long-term perspective,” added Mehta Equities report.

Tata Capital is a non-banking financial company (NBFC) that serves a wide range of borrowers from individuals to small businesses and large corporates. It offers over 25 lending products, including personal, business, and home loans. Apart from lending, it also provides investment banking, insurance, wealth management, and credit card distribution services.

“We believe Tata Capital Ltd IPO brings investors an opportunity to invest in India’s financial services space, combining scale, diversification, and strong brand credibility under the Tata Group. We think its advanced technology and analytics capabilities enhance underwriting, collections, and cross-selling, while the merger with TMFL expands its vehicle finance portfolio and strengthens operational efficiency. By looking at the financials, the company has delivered strong growth with revenue from operations rising 33.4% in FY2024 and 55.8% in FY2025, alongside steady profitability improvement with net profits up 4% in FY2024 and 16.3% in FY2025,” said Mehta Equities in its IPO note.

A retail application needs to apply for at least 46 shares in a lot, which amounts to Rs 14,996. The lot size investment for a small NII is 14 lots of 644 shares, aggregating to Rs 2 lakh, and for a big NII, it is 67 lots of 3,082 shares, totalling Rs 10 lakh.

Tata Capital operates in a highly competitive lending market alongside large NBFCs and private banks. Challenges include regulatory scrutiny, interest rate sensitivity, and asset quality pressures during economic downturns. Moreover, since a large part of the issue is an OFS, the fresh capital available for business expansion remains limited.

Also Read: Is Tata Capital IPO a Subscribe or Avoid? Experts break down what investors must know

As of the latest available trend, the shares of Tata Capital in the grey market is trading at a premium of Rs 7. This as of now is 2% above the upper price band of the issue. However, it is important to note that GMP is not the official listing price. GMP fluctuates based on the market sentiment.

The company already raised Rs 4,641.8 crore from 135 anchor investors on October 3, with participation from mutual funds, insurance firms, and global investors.

Before the IPO, Tata Sons held about 88.6% of the company, while the International Finance Corporation (IFC) owned around 1.8%. The OFS will see Tata Sons divesting roughly 23 crore shares, and IFC selling 3.58 crore shares. This means a major portion of the IPO will go towards existing shareholders exit rather than fresh capital infusion.

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For the year ended March 31, 2025, Tata Capital reported total income of Rs 28,370 crore and profit after tax (PAT) of Rs 3,655 crore. Its EBITDA stood at Rs 20,338 crore, and net worth at Rs 32,588 crore.

Tata Capital is a systemically important, upper-layer NBFC, operating as the financial services arm of Tata Sons. The company offers a wide range of lending and financial products from personal and home loans to SME financing and wealth management solutions.

“The IPO is priced at 4x FY25 P/B, in line with peers. Post-merger integration impacts from Tata Motors Finance are expected to normalize, supported by AAA ratings and a resilient funding profile. Macro tailwinds like India’s economic growth and digital adoption favor the business, though risks include regulatory changes, rate volatility, and competition. Recommendation: Subscribe for long-term horizon,” said Canara Bank Securities in its IPO note.

“Tata Capital offers a resilient business model with a focus on sustained growth supported by a diversified asset mix. The company currently commands a valuation of ~3.5x P/B on post issue basis (ex ESOP). We assign an Unrated rating,” said ICICI Direct in its IPO note.

A large portion of the IPO proceeds from the fresh issue will be used to strengthen Tata Capital’s Tier-1 capital base, a key regulatory requirement for upper-layer NBFCs under RBI norms. The company aims to use this capital to support lending expansion and meet future growth requirements.

“At the upper price band of Rs 326, the issue is valued at a P/BV multiple of 3.4x on post-issue capital. Tata Capital combines the strength of its Tata Group parentage, a diversified loan portfolio, robust risk management practices, and a pan-India omni-channel network to position itself as one of the most reliable and scalable NBFCs in India,” said SBI Securities in its IPO note

“The recent TMFL merger further expandsits presence in vehicle finance, adding scale and product diversity. During FY25 and 1QFY26, RoE and RoA have dipped due to losses from TMFL on a post-merger basis impacting profitability, which is expected to reverse in the future as the TMFL business turns profitable,” added the report.

Retail investors can bid for a minimum of 46 shares, requiring an investment of about Rs 14,996 at the upper price band. The bid lot increases in multiples of 46 shares, and larger investors such as HNIs and institutional buyers have higher minimum bid requirements as per SEBI rules.

Also Read: Tata Capital IPO sees strong response from anchor investors, raises Rs 4,642 cr ahead of IPO opening on October 6

The company has fixed the price band between Rs 310-326 per share, with a face value of Rs 10 each. This pricing puts Tata Capital’s valuation in line with other large NBFCs in the market.

Tata Capital aims to raise Rs 15,511.87 crore through this offering. The issue comprises a fresh issue of 21 crore shares worth Rs 6,846 crore, and an Offer for Sale (OFS) of 26.58 crore shares worth Rs 8,665.87 crore.

Also read: Tata Capital IPO opens today: Check GMP, issue price, 5 ‘must know’ details; Should you subscribe?

The Tata Capital IPO opens on October 6, and will close on October 8. The basis of allotment is likely to be finalised on October 9, with refunds expected by October 10. The shares are scheduled to be listed on the NSE and BSE on October 13, marking one of the most anticipated listings of the year.