4 Key Points Before You Apply to TATA Capital IPO! (Closing Today) 🏦
The TATA Capital IPO is one of the most anticipated market events of the year, opening for subscription from October 6-8, 2025. As the flagship financial services arm of the esteemed TATA Group, this is a strong IPO with a planned size of approximately ₹15,512 Crore. After a deep dive into the company's fundamentals and valuation, my final view leans towards a Long-Term investment strategy.
Final Verdict: Applying For Long-Term ✍️
While the valuation appears a bit aggressive, leaving little room for quick listing gains, the long-term value proposition is strong. TATA Capital is a fundamentally sound company poised for sustained growth. Let’s look at the key highlights and my rationale.
1. IPO Structure and Dates
This is a major public offering with both a Fresh Issue and an Offer For Sale (OFS):
| Particulars | Details |
|---|---|
| Issue Dates | October 6 - 8, 2025 |
| Price Band | ₹310 - ₹326 per share |
| Total Issue Size | 47,58,24,280 Shares (~₹15,512 Cr) |
| Fresh Issue Component | 21,00,00,000 Shares (~₹6,846 Cr) |
| Offer For Sale (OFS) | 26,58,24,280 Shares (~₹8,666 Cr) |
| Listing Date (Tentative) | October 13, 2025 |
2. Business Strength & Diversification
TATA Capital is India's 3rd Largest Diversified NBFC and is successfully executing an ambitious strategy:
- Flagship Status: It is the financial services flagship of the TATA Group, providing immense brand trust and a high credit rating.
- Comprehensive Portfolio: The company operates across Retail Finance (Home Loans, LAP, Personal Loans), SME Finance, and Corporate Finance, offering over 25+ products.
- Distribution Power: It boasts an extensive Pan-India network of 1,516 branches and a massive external ecosystem of 30,000+ DSAs and 8,000+ dealers, ensuring deep market penetration.
- Fastest Growing: It is among the fastest-growing NBFCs in India, serving over 7.3 million customers to date.
3. Financial and Operational KPIs
The company’s recent performance, including the impact of the TMFL merger, shows robust underlying health:
| Financials (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Total Income | 13,637 | 18,199 | 28,370 |
| PAT | 2,945.8 | 3,327 | 3,655 |
Note: Figures for FY25 reflect the acquisition of TMFL with an appointed date of April 1, 2024.
| Key Operational Metrics (Q1 FY26) | Value | Asset Quality (As at June 30, 2025) | Value |
|---|---|---|---|
| AUM/Gross Loans | ₹2,33,398.55 Cr | GNPA/Gross Stage 3 Loans Ratio | 2.1% |
| Disbursements YoY Growth (FY25) | 40.5% | NNPA/Net Stage 3 Loans Ratio | 1.0% |
| ROE (Annualised) | 12.5% | Provision Coverage Ratio (PCR) | 53.9% |
| Credit Rating | AAA Stable | Net Interest Margin (NIM) Ratio | 5.1% |
4. Valuation and My Strategy
Based on projected FY26E numbers (PAT: ~₹4,300 Cr, NAV: ~₹110), the valuation at the upper band is slightly stretched, with a potential fair value coming in at around ₹385 (based on a conservative 3.5x PB multiple). This implies a narrow short-term upside of about 18%.
- Short-Term View: I honestly don't see a significant move beyond 6-8% immediately post-listing. Factors like the massive size of the IPO, recent negative group-related developments, and the temporary deterioration in the books due to the TMFL merger could dampen immediate enthusiasm.
- Long-Term Rationale: The Fresh Issue proceeds (~₹6,846 Cr) are entirely for augmenting the Tier-1 Capital Base, ensuring the company can fuel organic growth for the next two years. The credit rating of AAA Stable is the highest possible, signaling exceptional stability. For a stable business with a scalable model, the current valuation, while rich, justifies a long-term position.
My strategy is to Apply with a view to hold. I will take short-term gains if the market presents them, but the core investment is for value appreciation over the medium to long term.
The Listing is unpredictable and driven by numerous external factors. Take your personal call.
Frequently Asked Questions (FAQs)
1. What is the key objective of the TATA Capital IPO?
The primary objective is to raise ₹6,846 Crore through the fresh issue to augment the company’s Tier-I capital base for future growth and onward lending, ensuring compliance with RBI regulations.
2. What is the latest Grey Market Premium (GMP) of TATA Capital?
As of October 08, 2025, the GMP is approximately ₹6.00, suggesting an estimated listing price of ₹332.00 per share. (Note: GMP is subject to daily market changes).
3. How does the TATA Capital valuation compare to its peers?
The IPO is valued at a P/E ratio of 35.99x based on FY25 earnings and roughly 3.5x PB on my FY26E estimates. This valuation is aggressive, as similar large NBFCs trade at comparable or slightly lower multiples, suggesting limited immediate upside post-listing.
4. When will the shares be credited to demat accounts?
The shares are tentatively scheduled to be credited to the demat accounts of successful allottees on October 10, 2025, with trading commencing on October 13, 2025.
5. Why is the asset quality (GNPA/NNPA) higher in the Q1 FY26 result?
The recent merger with TATA Motors Finance Limited (TMFL) has given TATA Capital a direct entry into the Commercial Vehicle (CV) financing space. While CV financing is a higher NIM product, the merger initially led to a temporary deterioration in the consolidated asset quality metrics (GNPA/NNPA) for a few quarters.
6. Who is the registrar for the IPO?
The registrar for the IPO is MUFG Intime India Private Limited.
7. How to check TATA Capital IPO Allotment?
You can check the IPO allotment on IPOwiz App or LinkIntime website.