Tata Capital's Rs 15,500-crore IPO closes with nearly 2x subscription, QIBs lead strong final-day demand

Tata Capital's Rs 15,500-crore IPO witnessed strong final-day momentum on Day 3, with bids totalling 1.95 times the issue size, led by robust demand from qualified institutional buyers (QIBs). According to consolidated NSE and BSE data, investors had bid for more than 65 crore shares against the 33.34 crore shares on offer.

Tata Capital's public issue continued to attract heavy investor participation on its final day of bidding on Wednesday, 8 October. It remains the largest IPO of 2025 so far and the biggest since Hyundai Motor India’s listing last year.

Strong institutional and retail interest

The QIB category was subscribed 3.42 times, led by strong demand from mutual funds and foreign institutional investors. The non-institutional investors (NII) portion stood at 1.98 times, while the retail investor segment reached 1.1 times. The employee quota continued to see healthy interest at 2.92 times.

The IPO had earlier raised Rs 4,642 crore from 135 anchor investors on 3 October, including Life Insurance Corporation of India (LIC), Morgan Stanley, Goldman Sachs, Amansa Holdings, and several domestic mutual funds.

Offer details and valuation context

Tata Capital offered 47.58 crore equity shares, comprising a fresh issue of 21 crore shares and an offer-for-sale of 26.58 crore shares by promoter Tata Sons and investor International Finance Corporation (IFC).

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The price band was fixed at Rs 310-326 per share, valuing the company at about Rs 1.38 lakh crore at the upper end. At that level, the stock is priced at roughly 3.4-4.1 times FY25 book value and around 32-38 times earnings, broadly comparable with large diversified NBFCs.

Analyst view

Brokerages remain positive on Tata Capital’s long-term prospects but cautious on near-term returns. SBI Securities noted that return ratios dipped in FY25 due to TMFL merger losses, though profitability is expected to improve as the vehicle-finance subsidiary turns profitable.

ICICI Direct pointed to the decline in the provision-coverage ratio to 58.5 percent and the rise in the average cost of borrowings to 7.8 percent, flagging potential pressure on margins. Aditya Birla Money highlighted gross Stage-3 loans of 2.1 percent and an unsecured loan share of about 20 percent, cautioning that any slippage could affect profitability and capital adequacy.

Despite these risks, analysts emphasise the company’s strong capital base, AAA credit rating, and diversified retail/SME portfolio, which together offer balance-sheet resilience. Several brokerages, including Anand Rathi and Aditya Birla Capital, have recommended ‘Subscribe – Long Term’ on the issue.

Next milestones

The IPO closed for subscription on October 8, with share allotment expected by October 9 and listing likely on the BSE and NSE on October 13.

Proceeds from the fresh issue will augment Tata Capital’s Tier-I capital to support future lending growth, while the offer-for-sale proceeds will go to Tata Sons and IFC.

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