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Key Points

Tata Capital concluded its initial public offering with a modest market performance, closing marginally higher than its issue price. The Rs 15,511 crore IPO attracted mixed investor response, with institutional investors showing more enthusiasm than retail participants. Domestic brokerages remain optimistic about the company's growth potential, citing strong secured loan portfolio and consistent financial metrics. The listing also aligns with RBI's regulatory requirements for upper-layer non-banking financial companies.

Key Points: Tata Capital IPO Closes Flat After Modest Market Debut

  • Tata Capital IPO priced at Rs 326 with 1.95x overall subscription
  • Qualified Institutional Buyers showed strongest interest at 3.42x
  • Company aims to strengthen Tier-1 capital through public issue
  • Delivered 31% CAGR in Assets Under Management from FY22 to FY24
2 min read

Tata Capital shares end almost flat after subdued listing

Tata Capital's Rs 15,511 crore IPO sees subdued listing with 1.56% premium, attracting moderate investor interest across segments.

"Approximately 80 per cent of Tata Capital's loan book is secured - Domestic Brokerage Report"

Mumbai, Oct 13

After witnessing a subdued listing, the shares of Tata Capital remained almost flat during its first trading session on Monday, closing at Rs 331.10, up 1.56 per cent from the IPO price of Rs 326 and 0.33 per cent from the listing price.

Earlier in the morning, the shares of the financial services subsidiary of Tata Sons opened flat at Rs 330 on both the NSE and BSE, at a 1.23 per cent premium above the issue price of Rs 326.

The listing price of Tata Capital was slightly above the grey market estimates. Ahead of the listing, unlisted shares of Tata Capital were trading flat at Rs 326, according to sources tracking unofficial markets.

The Rs 15,511-crore mainline IPO included a fresh issue of 210 million equity shares and an offer for sale of 265.8 million shares, with a price band of Rs 310-Rs 326. The public issue received a muted response from investors, registering an overall subscription of 1.95 times.

Qualified Institutional Buyers subscribed 3.42 times, Non-Institutional Investors at 1.98 times, and retail investors at 1.10 times.

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

Domestic brokerages have given an "Add" rating and a valuation of Rs 360, based on a 2.9x FY27E P/B to the stock, highlighting a strong growth profile and support from the Tata Group. The broking reported that approximately 80 per cent of Tata Capital's loan book is secured, with retail finance accounting for 61 per cent of the total.

Tata Capital delivered a 31 per cent CAGR in AUM from FY22 to FY24, with average RoA and RoE of 2.3 per cent and 18 per cent in FY23 and FY24, respectively.

The funds raised from the IPO will be used to strengthen Tata Capital's Tier-1 capital, supporting its future growth and lending requirements.

The listing is also being undertaken in line with the Reserve Bank of India's requirement that upper-layer non-banking financial companies (NBFCs) must go public within three years of classification

- IANS

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Reader Comments

R
Rohit P
Actually, this is a good opportunity for long-term investors. Tata brand + strong fundamentals + target price of Rs 360. I'm holding my shares! 💪
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Arjun K
The RBI mandate forced this listing, not market demand. That explains the flat performance. Companies should list when they're truly ready, not because of regulatory pressure.
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Sarah B
As someone who tracks NBFCs regularly, the 31% CAGR in AUM is impressive. The secured loan book at 80% gives comfort. This could be a steady performer over time.
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Michael C
Applied for IPO but didn't get allotment. Now thinking whether to buy from market. The flat listing might give better entry price than expected! 📈
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Kavya N
Retail investors were smart to stay away. Too many IPOs happening, and this one didn't offer anything special. Better opportunities in secondary market right now.

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