The highly anticipated Rs 15,512 crore initial public offering (IPO) of Tata Capital Ltd entered its second day of bidding on Tuesday, with investors closely tracking subscription levels and expert views.
On the first day, the IPO received 39 per cent subscription. Data from the National Stock Exchange (NSE) showed bids for 12.86 crore shares against 33.34 crore shares on offer.
The Qualified Institutional Buyers (QIB) portion was subscribed 52 per cent, Retail Individual Investors (RIIs) 35 per cent, and Non-Institutional Investors (NIIs) 29 per cent.
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Anil Singhvi’s View: Apply for Long Term
Market Guru and Zee Business Managing Editor Anil Singhvi has advised investors to apply in the Tata Capital IPO with a long-term perspective.
According to him, the IPO is one of the largest in recent years and, given its size, the chances of allotment are high. However, he cautioned investors not to expect hefty listing gains.
Singhvi said, “This IPO is best suited for long-term investors. The company has strong promoters, a robust business model, and enjoys the highest AAA credit rating. But because of the large issue size, there may not be a huge premium on listing.”
Tata Capital IPO Key Positives
Analysts highlight several strengths of Tata Capital. The company, backed by Tata Sons, is among the top three non-banking financial companies (NBFCs) in India.
It has a diversified portfolio of more than 25 lending products, catering to individuals, SMEs, and corporates.
Tata Capital also distributes insurance and credit cards, provides wealth management services, and manages private equity funds.
Its conservative approach with a greater focus on secured loans, strong distribution network, and experienced management adds to its credibility.
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Tata Capital IPO Key Risks
On the flip side, Anil Singhvi note that Tata Capital’s loan yields are lower compared to peers. The merger of Tata Motors Finance has put some pressure on asset quality.
Additionally, competition in the NBFC space remains stiff, and around 20 per cent of the loan book consists of unsecured loans, which carry higher risk.
Tata Capital IPO Details
The IPO, priced in the band of Rs 310–326 per share, includes a fresh issue of 21 crore shares and an Offer for Sale (OFS) of 26.58 crore shares.
Tata Sons will offload 23 crore shares, while International Finance Corporation (IFC) will divest 3.58 crore shares.
Proceeds from the fresh issue will be used to strengthen Tier-1 capital, supporting future lending growth.
This is the Tata Group’s second big listing after Tata Technologies in November 2023. The IPO will close on October 8, and Tata Capital is expected to debut on the stock exchanges on October 13.
