MUMBAI – After months of anticipation, Tata Capital Ltd began trading on the BSE and NSE with little fanfare. In a market buoyed by retail speculation and quick institutional moves, the listing delivered a reality check.
The stock opened at ₹330 per share, a 1.23% premium to the issue price of ₹326, then slipped around before closing at ₹331.10 on the NSE, up just 0.33% from the open. Those who bought unlisted shares well above ₹1,000 in past years found little to cheer, a reminder that pre-IPO bets carry real risk in an NBFC space prone to sharp swings in valuation.
This ₹15,512 crore issue, the largest IPO of 2025 and the Tata Group’s first big float since Tata Technologies in 2023, drew intense scrutiny. The offer combined a ₹6,846 crore fresh issue to boost Tier-1 capital for lending, with an ₹8,666 crore offer for sale by Tata Sons and the International Finance Corporation.
The war chest, on paper, sets Tata Capital up to serve a credit-hungry economy. Analysts expect NBFC assets under management to grow at a 24% CAGR through the decade. Even so, the flat debut matched a grey market premium that held at ₹0 to ₹7 before listing, revealing deeper unease.
The overall subscription stood at 1.96 times, led by QIBs at 3.42 times, while retail interest was mild at 1.10 times. Talk of rich pricing persisted, shaped by a recent merger backdrop that included Tata Motors Finance’s asset quality issues.
Tata Capital Share Price Broadens the Franchise
Tata Capital runs a broad franchise, with more than 25 lending products. The loan book leans to retail at 61%, followed by small and medium enterprises at 26%, and corporates at 13%. AUM reached ₹1.9 lakh crore as of June 2025, up at a 31% CAGR from FY22 to FY24, backed by a AAA rating from Crisil.
Its digital push has delivered 21.9 million app downloads and 75.8 million website visits in FY25. The company reported a net profit of ₹2,438 crore for FY25, with ROE at 14.6% and ROA near 2.3%. The merger with Tata Motors Finance, completed earlier this year, added heft but lifted gross NPAs to 1% from 0.5%. Some analysts see that as a risk if growth softens or rates stay firm.
The quiet start jarred with October’s IPO surge, where proceeds are set to top $5 billion. LG Electronics India’s ₹10,800 crore issue, for instance, carries talk of a strong listing, with GMPs pointing to a 33% pop. Tata Capital’s first day, alongside a 174-point fall in the Sensex, reflects several pressures.
The RBI’s mandate for upper-layer NBFCs to list removed room for delay, even if the group preferred to avoid dilution. There has also been noise around governance at Tata Sons. Investors are also wary of high P/E stocks in financials.
Tata Capital lists at 35 times FY25 earnings, above Shriram Finance at 12 times and Bajaj Finance at 33 times. On price to book, it sits at 4.1 times FY25, cheaper than Bajaj at 5.6 times but higher than Cholamandalam Investment at 3.7 times. That leaves a narrow lane for a near-term re-rating.
Moderate Returns Limit Rerating
How should investors react? Market voices lean to patience, with a tilt to buying on dips rather than quick trades. Emkay Global Financial Services and JM Financial both started coverage with Add ratings and a 12-month target of ₹360, which implies a 9 to 10% gain from the issue price. JM’s note calls Tata Capital a sound play on NBFC growth, backed by a strong parent and a varied book.
It models a 20% AUM CAGR and 34% PAT growth over FY25 to FY27, with ROA and ROE settling near 1.9% and 13%. Emkay agreed, citing a 7.5% blended cost of funds and solid digital reach, but warned that moderate returns limit a quick rerating, so book value growth may do most of the heavy lifting.
Prashanth Tapse, senior vice president at Mehta Equities, urged those who received shares to hold for the long term, given policy support for NBFC borrowings and recovering consumption. He advised those who did not receive shares to wait and buy on weakness below ₹310, with an eye on Q2 results for signals on merger progress.
Shivani Nyati at Swastika Investmart struck a similar tone, calling valuations fair and risk controls strong. She suggested partial profit booking near ₹330, with a stop-loss at ₹300 to manage swings.
Dhiraj Relli, CEO of HDFC Securities, linked the flat start to the Tata group’s boardroom overhang and better hype around LG, but still saw value at a 2.7 times FY27 price-to-book, compared with HDB Financial at 2.5 times.
Loyal Tata Investors
Doubts remain. Pradip Halder of PHD Capital warned the stock could fall below ₹300 in the coming weeks, recommending a wait of two weeks as sentiment digests the debut and memories of Tata Technologies’ slide after listing weigh on minds. On X, reactions split.
Handles such as @ipo_mantra praised the small premium in a risk-off market, while @dmuthuk criticized steep losses for unlisted buyers as a FOMO penalty. Many noted the irony. A Tata IPO in a month set for $5 billion in deals arrived without the thrill often seen from retail money.
For loyal Tata investors, yesterday looked more like a careful first step than a stumble. As Saurabh Agrawal, group CFO of Tata Sons, said at the NSE ceremony, the company begins life as a listed entity with a focus on trust and scale.
In an NBFC market where fintechs squeeze margins and banks fight to win back borrowers, Tata Capital’s mix of heritage and new tools could build results over time. For now, a 1.2% premium tells a familiar story on Dalal Street.
Even giants have to prove themselves. Dip buyers may follow Tapse’s script, weighing the lure of 20% AUM growth against merger after-effects and the broader macro picture. In finance, like the monsoon, the first drops mean little. The gains tend to follow when the real rain arrives.
