October 8, 2025 | Market News
The much-awaited Tata Capital IPO hasn’t received the kind of response many expected. Despite being one of the biggest issues from the Tata Group, investor subscription numbers are relatively low so far. Here’s a look at what’s keeping investors cautious.
💰 Subscription Still Below Expectations
According to market updates, the Tata Capital IPO has seen slow demand from retail and institutional investors. While analysts initially expected strong interest, the subscription rate remains below 100% midway through the issue.
Even the grey market premium (GMP) — often seen as an indicator of market sentiment — has fallen sharply to around 3–4%, suggesting limited listing gains.
🧐 Why Investors Are Holding Back
1. Valuation Looks Stretched
Many investors believe Tata Capital’s IPO price band of ₹310–₹326 per share leaves little room for short-term gains. The company’s valuation is on the higher side compared to some peers, making it less attractive for quick returns.
2. Unlisted Shareholders Disappointed
Before the IPO, Tata Capital’s unlisted shares traded around ₹1,000. The IPO price being much lower has hurt sentiment among early investors, who now face paper losses of up to 70%.
3. Concerns Over Loan Book Quality
After merging with Tata Motors Finance, Tata Capital’s non-performing assets (NPAs) saw a slight uptick. Some investors are worried about how this could affect the company’s profitability in the near term.
4. Too Many IPOs at Once
The current IPO season is packed with large issues. With limited liquidity, investors are being selective and prefer companies offering higher listing-day potential.
5. Weak Short-Term Sentiment
Many retail traders entered hoping for strong debut gains, but the soft GMP and cautious market mood have made them rethink fresh applications.
📈 Still Solid for the Long Term
While short-term traders may be staying away, long-term investors still see potential in Tata Capital. The company has a strong brand, diversified business lines, and steady growth in retail and SME lending.
Experts believe the IPO could suit long-term wealth builders who trust the Tata brand and can hold through short-term volatility.
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