The Tata Capital IPO opened today, October 6, 2025, offering investors a chance to participate in the growth of the Tata Group's flagship financial services company. The IPO, with a total issue size of ₹15,511.87 crore, comprises a fresh issue of 21.00 crore shares aggregating to ₹6,846.00 crore and an offer for sale of 26.58 crore shares aggregating to ₹8,665.87 crore. The IPO will remain open for subscription until October 8, 2025, with allotment expected to be finalized on October 9, 2025, and listing on the BSE and NSE tentatively scheduled for October 13, 2025.
Price Band and Lot Size
The price band for the IPO has been fixed at ₹310 to ₹326 per share. Investors can bid for a minimum of 46 shares in a lot, requiring a minimum investment of ₹14,996 at the upper price band. Retail investors can bid for a maximum of 13 lots, which is equivalent to 598 shares, amounting to ₹1,94,948.
Grey Market Premium (GMP)
The grey market premium (GMP) for Tata Capital shares has shown some fluctuation. On October 6, 2025, the GMP was around ₹15, a decrease from ₹20 over the weekend and a more significant drop from ₹31 in the previous week. This suggests a listing gain of approximately 4.60% based on the upper price band. However, it is important to note that GMP is not an official indicator and can be volatile. Some market observers attribute the dip in GMP to the offer for sale (OFS) nature of the IPO. As of September 30, 2025, the GMP was ₹15, with expected returns of 4.60%.
Objectives of the IPO
Tata Capital intends to utilize the net proceeds from the fresh issue to augment its Tier-I capital base. This will help the company meet its future capital requirements, including onward lending, arising from the growth of its business. The IPO is also expected to enhance the company's brand name and create a public market for its equity shares in India.
Company Overview
Tata Capital Limited, a subsidiary of Tata Sons Private Limited, is the flagship financial services company of the Tata Group. The company is registered with the RBI as a Non-Banking Financial Company (NBFC) - Upper Layer. As of June 30, 2025, Tata Capital has served 7.3 million customers and offers a comprehensive suite of over 25 lending products. Their services cater to a diverse customer base, including salaried and self-employed individuals, entrepreneurs, small businesses, SMEs, and corporates. The company operates across Retail Finance (61.3% of Gross Loans), SME Finance (26.2%), and Corporate Finance (12.5%).
Financial Performance
Tata Capital has demonstrated consistent financial performance. For the last three fiscals, the company has posted increasing total income and net profit. For Q1 of FY26 ended on June 30, 2025, it earned a net profit of Rs. 1040.93 crore on a total income of Rs. 7691.65 crore. The company has also maintained Net Interest Margins (NIM) and Return on Equity (ROE).
Strengths and Risks
Tata Capital possesses several strengths, including its strong brand recognition and the Tata Group's legacy. It is the third-largest diversified NBFC in India, offering a wide range of lending products and having an omni-channel distribution network. The company also has a robust risk management framework and an advanced digital infrastructure. However, there are also certain risks to consider. These include the company's substantial borrowings, involvement in legal proceedings, and potential for customer defaults.
Anchor Investors
Ahead of the IPO, Tata Capital raised ₹4,642 crore from anchor investors, allotting 14.24 crore shares to 135 funds at ₹326 apiece. The anchor book saw participation from both domestic and foreign institutional investors, including prominent names like LIC, ICICI Prudential Mutual Fund, and Goldman Sachs.
Expert Reviews
Analysts have offered varied opinions on the IPO. Canara Bank Securities assigned a "subscribe" tag for the long term, citing Tata Capital's strong position in the growing NBFC sector. Other analysts believe the pricing leaves adequate headroom for long-term investors and recommend subscribing to the IPO. However, some analysts have expressed concerns about the valuation, suggesting that the issue appears aggressively priced based on recent financial data.
Overall
The Tata Capital IPO presents an opportunity to invest in a well-established financial services company with a strong brand and diversified operations. However, investors should carefully consider the company's financial performance, potential risks, and expert reviews before making a decision.
