Tata Capital IPO fully subscribed on final day; strong demand across investor categories—Should you invest?

Tata Capital Ltd, the non-banking financial company (NBFC) of the Tata Group, saw its initial public offering (IPO) fully subscribed on the final day of the share sale on Wednesday.

According to NSE data at 12:30 pm, the IPO received bids for 35.49 crore shares against the 33.34 crore shares on offer, reflecting robust investor interest.

Tata Capital IPO Subscription Status

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The subscription varied across investor categories. Qualified Institutional Buyers (QIBs) saw 128 per cent subscription, while non-institutional investors (NIIs) contributed to a 122 per cent subscription.

Retail Individual Investors (RIIs) registered an 87 per cent subscription.

Tata Capital IPO: Anchor Capital

Ahead of the public offering, Tata Capital had already raised Rs 4,642 crore from 68 domestic and global institutional investors through its anchor book on Friday, which saw demand nearly five times higher than the allocated amount.

The Rs 15,512 crore IPO comprises 47.58 crore shares, including a fresh issue of 21 crore equity shares and an Offer For Sale (OFS) of 26.58 crore shares.

Under the OFS, Tata Sons is offloading 23 crore shares, while the International Finance Corporation (IFC) will divest 3.58 crore shares. Currently, Tata Sons holds an 88.6 per cent stake in Tata Capital, and IFC owns 1.8 per cent.

Tata Capital IPO: Price Band

The price band for the IPO is set at Rs 310-326 per share. At the top end of the band, the company commands a valuation of around Rs 1.38 lakh crore.

Tata Capital IPO: Listing Day

Tata Capital is expected to make its stock market debut on October 13.

Tata Group’s Second Public Listing

The proceeds from the IPO will be used to strengthen Tata Capital’s Tier-1 capital base, supporting future capital requirements and onward lending.

This IPO marks the Tata Group’s second public listing in recent years, following the debut of Tata Technologies in November 2023.

The listing also aligns with the Reserve Bank of India’s (RBI) mandate requiring upper-layer NBFCs to be listed within three years of classification.

Tata Capital was designated as an upper-layer NBFC in September 2022.

Tata Capital IPO: Company Profile

Tata Capital has a diverse portfolio of over 25 lending products catering to salaried and self-employed individuals, entrepreneurs, small businesses, SMEs, and corporates.

Besides lending, the company distributes third-party products such as insurance and credit cards, provides wealth management services, and acts as a sponsor and investment manager for private equity funds.

Should You Invest? Anil Singhvi Answers

Anil Singhvi of Zee Business suggests that investors approach Tata Capital’s IPO with a long-term perspective rather than expecting quick listing gains. He notes the IPO is large with good allotment chances, making it suitable for steady growth investors.

Key positives include strong promoters, a top-three NBFC position in India, an AAA credit rating, a diversified business model, and a robust distribution network.

On the downside, loan yields are lower than peers, there are some asset quality concerns from the Tata Motors Finance merger, stiff competition, and around 20 per cent unsecured loans.

Overall, Singhvi sees it as a stable investment with long-term growth potential.