LIVE: Tata Capital IPO subscribed 74% so far on Day 2, GMP falls to 1.7%; Check issue price and other key details

NBFCs accounted for 21% share of the overall systemic credit as of FY25, compared to 72% contribution of banks. Its share is expected to increase to 22% by FY28, led by healthy credit growth. NBFCs compete with banks, microfinance institutions, digital lenders and Fintechs, by leveraging their strengths in last-mile credit delivery, faster processing, and tailored solutions.

Tata Capital has a total of six listed peers. Bajaj Finance, Shriram Finance, Cholamandalam Investment and Finance Company, L&T Finance, Sundaram Finance, and newly listed HDB Financial Services are the direct listed competitors of the company.

Tata Capital has taken significant steps towards automating its internal processes across various business and functions. As of June 2025, it had over 400 unique live APIs powering their ecosystem and over 350 RPA processes, which have helped automate its mid and back-office operations, thereby reducing manual effort and improving employee productivity.

Tata Capital’s robust risk management framework equips them to address changing market dynamics, customer needs, and regulatory requirements. As they continue to expand their loan portfolio, broaden their product offerings, and penetrate new markets, they remain committed to maintaining high asset quality by continuously strengthening their risk management practices, credit underwriting processes, and collections infrastructure.

Tata Capital’s issue was subscribed to a total of 0.58 times so far. The retail section was booked 0.59 times, while the employee category was booked 1.7 times. The NIIs and QIBs also showed muted response as of Day 2. The NIIs subscribed the IPO 0.56 times, while the QIBs booked it 0.55 times.

Tata Capital’s growth has been driven by a diverse portfolio of 25+ lending products and their extensive pan-India presence with 1,516 branches, catering to the needs of various customer segments. They are committed to sustain this growth by identifying promising business opportunities that offer long-term potential for profitability and sustainability.

For instance, they launched microfinance loans in FY22, factoring in FY23, secured business loans and education loans in FY24, and new car loans in FY25. Moving forward, they will continue to expand their product range and launch innovative solutions to meet evolving market demands and customer expectations.

NBFCs are classified based on liabilities into two broad categories: deposit-taking and non-deposit-taking. Further, in 2015, non deposit-taking NBFCs with an asset size of Rs 500 crore and above were labelled as ‘systemically important non-deposit taking NBFCs’ (‘NBFC–ND–SI’) and separate prudential regulations were made applicable to them.

The credit outstanding of the LAP portfolio stood at Rs 14 lakh crore as of FY25. In parallel, credit outstanding of the unsecured business loans (which are included in the overall business loans segment, alongside general business loans and loans to professionals) has grown at 20.6% CGAR over FY20-25 to reach Rs 10 lakh crore as of FY25, while is expected to expand at 16–18% CAGR over FY25-28.

Tata Capital seeks to reduce its credit cost ratio below 1% by strengthening risk management and credit underwriting, supported by digital tools and analytics. By maintaining a diversified loan portfolio across products, customers, and geographies, and increasing the share of secured lending, the company minimises concentration risks.

“At the upper price band company is valuing at P/E of 32.3x, P/B of 3.5x to its FY25 earnings and market cap of Rs 1,38,383 crore post issue of equity shares. We believe that the IPO is fully priced and recommend a ‘Subscribe-Long Term’ rating to the IPO,” said Anand Rathi Research in an IPO note.

Tata Capital’s branches are supported by an extensive network of external channels comprising over 30,000 DSAs, over 400 OEMs, more than 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.

Tata Capital have integrated advanced, data-driven capabilities with their front-end, branch-led distribution model for improved customer engagement and onboarding across both assisted and self-service journeys. Their technology platform is integrated with APIs, enabling their systems to pre-fill data in loan applications, conduct KYC verification and undertake other credit checks in real-time, thereby simplifying the onboarding process. The company’s 97.8% and 97.1% customers were onboarded through their digital platforms in FY25 and the three months period ended June 2025, respectively.

Tata Capital typically offer to salaried and self-employed individuals and owners of small businesses (‘Retail Customers’) a wide range of loans, such as home loans, loans against property, personal loans, business loans, two-wheeler loans, car loans, commercial vehicle loans, construction equipment loans, loans against securities, microfinance loans, and education loans. As of June 2025, Retail

Finance comprised 61.3% of their Total Gross Loans.

The industry’s Assets Under Management (AUM) has witnessed significant expansion from less than Rs 2 lakh crore in 2000 to Rs 48 lakh crore as of FY25. NBFC credit has observed expansion at 13.2% CAGR over FY19-25, driven by strong demand across retail, MSME, and corporate segments.

“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.

Tata Capital is registered as a systemically important, upper-layer NBFC under RBI regulations. The company offers a wide range of products, including personal loans, housing finance, SME lending, and wealth management services.

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

Before the IPO, Tata Sons held 88.6% of Tata Capital, while IFC owned around 1.8%. Post-IPO, Tata Sons will reduce its stake by selling about 23 crore shares, and IFC will divest 3.58 crore shares.

As a result, the IPO will lead to a diversified ownership base but also mark a significant promoter-level dilution.

“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.

Funds raised through the fresh issue will be used primarily to strengthen Tata Capital’s Tier-1 capital base, in line with RBI’s requirements for upper-layer NBFCs. The capital infusion is intended to enhance the company’s lending capacity and support future growth.

The proceeds from the Offer for Sale will go entirely to existing shareholders – Tata Sons and the International Finance Corporation (IFC) as part of their partial divestment.

“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.

The price band has been fixed between Rs 310 and Rs 326 per share, with a face value of Rs 10 each. The IPO values Tata Capital in line with other major non-banking financial companies (NBFCs).

Retail investors can apply for a minimum of 46 shares per lot, translating to a minimum investment of Rs 14,996 at the upper end of the price band. Applications can be made in multiples of 46 shares, with higher thresholds for HNIs and institutional investors as per SEBI regulations.

The bidding window for the Tata Capital IPO runs from October 6 to October 8. The basis of allotment is expected to be finalised on October 9, while refunds are likely to be processed by October 10. The company plans to list its shares on both the NSE and BSE on October 13.

Prior to the public offering, Tata Capital raised around Rs 4,641.8 crore from 135 anchor investors on October 3, including mutual funds, insurance firms, and global institutional participants.

“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.

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.

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.

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 credit growth is expected to grow at a healthy pace of 15–17% CAGR over FY25-28, led by stronger consumer demand and increasing financial inclusion, particularly in the underserved segments. The ongoing recovery in consumption trends is also anticipated to contribute meaningfully to the credit momentum in FY26.

The last GMP for Tata Capital IPO is Rs. 12.5, last updated on Oct 6th, 2025, at 05:58 PM. With the price band of Rs. 326.00, Tata Capital IPO’s estimated listing price is Rs. 338.5.

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 is seeing a steady response on its first day of bidding, according to the latest data from the BSE. So far, total subscription has reached about 38%.

By investor category, Qualified Institutional Buyers (QIBs) have bid for 0.29 times their allotted quota, while Non-Institutional Investors (NIIs) have subscribed 0.16 times. The Retail Individual Investors (RIIs) portion stands at 0.24 times, and the employee segment has drawn stronger interest with 0.75 times subscription.

Overall, the IPO is witnessing consistent participation as it remains open for bidding.

The credit growth is expected to grow at a healthy pace of 15–17% CAGR over FY25-28, led by stronger consumer demand and increasing financial inclusion, particularly in the underserved segments. The ongoing recovery in consumption trends is also anticipated to contribute meaningfully to the credit momentum in FY26.