October 6, 2025: Tata Capital, the financial services arm of the Tata Group, has launched its Initial Public Offering (IPO), making it one of the largest IPOs by a non-banking financial company (NBFC) in India. The company aims to raise around ₹15,500 crore through the offering, which includes both fresh shares and shares sold by existing investors.
The IPO is priced between ₹310 and ₹326 per share and will remain open from October 6 to October 8, 2025. Once listed, Tata Capital plans to use the fresh capital to strengthen its lending capacity and expand its operations across India.
Key Details of the IPO
- Total Issue Size: ₹15,511 crore
- Fresh Shares: ₹6,846 crore for capital growth
- Offer for Sale (OFS): ₹8,665 crore from existing shareholders
- Number of Shares: Around 47.5 crore
- Promoter Stake Post-IPO: Reduced from 95.6% to 85.5%
- Listing Date: October 13, 2025
Financial Snapshot
- Revenue (FY25): ₹28,300 crore
- Net Profit (FY25): ₹3,655 crore
- Debt-to-Equity Ratio: 6.6
- Return on Net Worth (RoNW): 11.2%
- Return on Assets (RoA): 1.8%
- Net Interest Margin (NIM): 5.2%
The company’s debt level is moderate for an NBFC, with a healthy balance between lending and equity capital.
Pros of Investing
- Strong Brand Support: Tata Group backing builds investor confidence.
- Diversified Loan Portfolio: Offers loans across retail, SME, and corporate segments.
- Good Asset Quality: Non-performing assets are lower than industry averages.
- Capital Infusion: Fresh funds will support growth and strengthen capital adequacy.
Cons to Consider
- Valuation: Price-to-earnings and price-to-book ratios are slightly higher than peers.
- Lower Margins: NIM and returns are lower than some top NBFC competitors.
- Legal Risks: Some pending cases and contingent liabilities exist.
- Unsecured Loans: Around 20% of loans are unsecured, which could carry higher risk.
- Competition: Faces strong competition from banks and fintech companies.
Investors should closely track the IPO’s subscription rate across different categories—such as retail, qualified institutional buyers (QIBs), and non-institutional investors. Subscription trends can indicate market demand and potential listing performance.
Takeaway
Tata Capital’s IPO offers investors a chance to join a well-known financial institution with a diversified lending portfolio. However, it’s important to carefully evaluate valuation, debt levels, and market competition before investing. Consulting a financial advisor is recommended to see if this IPO aligns with your investment goals.
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