Tata Capital IPO: Details of the ₹15,512 Crore Public Issue

Introduction to Tata Capital's Public Offering

Tata Capital Limited, the financial services arm of the Tata Group, launched its much-anticipated Initial Public Offering (IPO) in October 2025. The issue, valued at ₹15,511.87 crore, marked one of the largest public offerings in the Indian financial sector for the year. The IPO opened for subscription on October 6, 2025, and concluded on October 8, 2025, setting the stage for its market debut on both the BSE and NSE.

IPO Structure and Offer Details

The public issue was a combination of a fresh issue of shares and an Offer for Sale (OFS) by existing shareholders. The company aimed to raise ₹6,846 crore through the fresh issue of 21 crore equity shares. The proceeds from this component are intended to augment the company's Tier-I capital base to support future growth and lending activities. The OFS component consisted of 26.58 crore shares, aggregating to ₹8,665.87 crore, allowing promoter Tata Sons and investor International Finance Corporation (IFC) to partially divest their holdings.

Subscription and Investor Response

The Tata Capital IPO garnered a moderate response from investors, with the issue being subscribed 1.95 times overall by the final day of bidding. The Qualified Institutional Buyers (QIB) category led the demand, with a subscription of 3.42 times. The Non-Institutional Investors (NII) portion was subscribed 1.98 times, while the Retail Individual Investors (RII) category saw a subscription of 1.10 times. Ahead of the public issue, the company successfully raised ₹4,641.83 crore from 135 anchor investors on October 3, 2025, indicating strong institutional confidence.

Company Overview and Financial Health

Established in 2007, Tata Capital is a diversified Non-Banking Financial Company (NBFC) and a subsidiary of Tata Sons. It ranks as the third-largest diversified NBFC in India, with a loan book of ₹2.33 lakh crore as of June 2025. The company operates across various segments, including retail finance (61.3%), SME finance (26.2%), and corporate finance (12.5%). With a network of over 1,500 branches, it serves a customer base of more than 7.3 million. The company's financial performance has been robust, with revenue from operations growing to ₹28,313 crore in FY25 from ₹18,175 crore in the previous year. Net profit for FY25 stood at ₹3,655 crore.

The Regulatory Push for Listing

The IPO was not just a strategic move for capital raising but also a regulatory necessity. The Reserve Bank of India (RBI) has classified Tata Capital as an "upper-layer" NBFC. Under these regulations, such entities are required to list on stock exchanges within a specified timeframe to enhance transparency and governance. This mandate made the IPO a non-negotiable step for the company, with a deadline set for September 2025.

Allotment and Listing Performance

The basis of allotment for the IPO was finalized on October 9, 2025, with shares credited to the demat accounts of successful applicants on October 10. The stock made its market debut on October 13, 2025. The listing was modest, opening at ₹330 on both BSE and NSE, a small premium over the issue price of ₹326. Post-listing, the stock has seen some pressure. By early December 2025, the shares were trading slightly below the issue price. However, brokerage firm Kotak Institutional Equities initiated coverage with an 'Add' rating and a price target of ₹360, citing the company's diversified portfolio and strong growth prospects.

Market Outlook and Analyst Views

Analysts have maintained a cautiously optimistic view on Tata Capital. The company's strong brand parentage, diversified loan book, and consistent financial growth are seen as key strengths. The valuation, with a price-to-book ratio of around 3.2x based on FY26 annualized earnings, was considered reasonable compared to its peers. The merger with Tata Motors Finance Ltd. is also expected to enhance its vehicle finance portfolio and drive operational efficiencies. While the initial market performance has been subdued, the long-term outlook remains positive, positioning Tata Capital as a key player in India's growing financial services landscape.

Conclusion

Tata Capital's IPO was a significant event in the Indian capital markets, driven by both strategic growth plans and regulatory requirements. While the subscription numbers and listing performance were not spectacular, the company's strong fundamentals, brand equity, and market position provide a solid foundation for future growth. For investors, it represents an opportunity to participate in the journey of a large, diversified NBFC with a long-term perspective.