Tata Capital IPO: Brokerages bullish even as GMP signals mixed trends

Tata Capital, the flagship financial services arm of the Tata Group, will open its Rs 15,511 crore initial public offering ( IPO) for subscription on October 6. The issue, priced between Rs 310 and Rs 326 per share, comprises a fresh issue of shares worth Rs 6,846 crore and an offer for sale (OFS) of Rs 8,665 crore by existing shareholders.

The IPO closes on October 8, with listing likely on October 13. The grey market premium ( GMP) stands at around 3%.

With this offering, Tata Capital marks one of the largest NBFC listings in India’s market history. The company is the third-largest diversified non-banking financial company (NBFC) in the country, with total gross loans of Rs 2.33 lakh crore as of June 30, 2025.

Its loan book grew at a robust compound annual rate of 37.3% between FY23 and FY25, supported by strong growth in retail and SME lending.

The company reported a net profit of Rs 3,665 crore in FY25 on revenue of Rs 28,313 crore, up 56% year-on-year. Its net interest margin stood at 5.2%, while gross and net stage 3 loan ratios were at 2.1% and 1%, respectively—among the best in the sector.

Tata Capital’s asset quality, diversified book, and AAA-rated credit profile are seen as key strengths.

Should you subscribe?
Analysts at Anand Rathi have given the IPO a Subscribe–Long Term rating, noting that Tata Capital is a flagship financial services company of the Tata Group with one of the widest lending product portfolios and an omni-channel distribution network combining physical and digital strengths.

The brokerage added that the IPO is fully priced, but offers a strong long-term opportunity given its scale, brand, and digital-first lending strategy.

Canara Bank Securities echoed the optimism, recommending a Subscribe for Long Term stance as well. It said, Tata Capital is well-positioned in India’s fast-growing NBFC sector, backed by strong parentage, diversified portfolio, prudent risk management, and AI-driven operational efficiency.

While competition and rate volatility are risks, its fundamentals and brand strength support sustained growth.

At the upper price band, the issue values the company at 3.5x FY25 book value and 32x earnings—comparable to peers like Bajaj Finance and Cholamandalam Investment. Analysts expect the merger with Tata Motors Finance to strengthen its vehicle finance segment and add to overall scale.

For investors, Tata Capital’s IPO offers a play on India’s expanding retail and SME credit markets through one of the country’s most trusted financial brands.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)