Rama Krishna Sangem
After all, it is not a bad idea to subscribe to the upcoming Tata Capital IPO, if you are a long time investor. Tata Capital Ltd’s Rs 15,512-crore initial public offering (IPO) is set to be the largest-ever listing from the Tata Group and the biggest by any NBFC in India, and opens for public subscription on Monday, October 6. The issue carries a price band of Rs 310–326 a share and a lot size of 46 shares.
The company has already raised Rs 4,642 crore from anchor investors, with the portion reportedly subscribed nearly five times, reflecting strong institutional demand ahead of the main issue. Excel India analyzed a lot of information on this in the market and present it here in a few paras.
The IPO comprises a fresh issue of 21 crore shares and an offer for sale (OFS) of about 26.6 crore shares. The basis of allotment will be finalised on Thursday, October 9, while credit to demat accounts is expected by October 10. The stock is slated to debut on the BSE and NSE on Monday, October 13.
In the grey market, Tata Capital shares are commanding a premium of Rs 24–26 over the issue price, suggesting a potential listing gain of 7–8 per cent for short-term investors at the upper end of the price band.
What leading brokerage firms say
SBI Securities flags a recent dip in ROE and ROA — attributable to TMFL losses on a post-merger basis — but expects this to reverse as the Tata Motors Finance Ltd (TMFL) business turns profitable. The note highlights that the TMFL merger expands Tata Capital’s vehicle-finance scale and product diversity.
Deven Choksey’s note points out that Tata Capital’s initial issue is priced at “4.1x TTM P/B” versus a peer average of “3.7x TTM P/B.” On a return profile basis — ~4.1x P/B and ~1.9 per cent RoA versus peer avg. ~3.7x P/B and ~3.0 per cent RoA — it “appears fairly valued” in his assessment.
BP Wealth analysts note the current P/BV multiple is 4.1x (based on FY25 book value) and believe the company is reasonably valued. They recommend investors to “Subscribe” from a medium- to long-term perspective.
Mehta Equities concludes investors should “Subscribe” to the issue for a long-term perspective. Using annualised FY26 earnings and fully diluted post-IPO equity, the note calculates a post-IPO PB of about “3.2x”, which it says looks reasonable against a ~4x comparable-peer average — leaving scope for listing gains and long-term value creation.
Canara Bank Securities recommends “Subscribe for long-term horizon”, arguing Tata Capital is “well-positioned in India’s growing NBFC sector” thanks to a diversified portfolio, Tata brand trust, prudent liability management, superior asset quality and an AI-enabled “phygital” model. The note flags normalization of merger-related impacts over time, while noting macro and regulatory risks (rate volatility, competition, regulatory change).
Finally, we all know, Tatas are very conservatives when it comes to investing. Their capital financing arm too will be the same. So, the losses share will be minimum, though we cannot bet on their profits. You can expect a steady and stable profits for the company in the coming years, so please go ahead!
