Tata Capital IPO: 10 things to know including key RHP details, GMP, risks, analyst views

Tata Capital's initial public offering (IPO) opens for public subscription on Monday, 6 October 2025, with a price band set at Rs 310-326 per equity share, with lot size of.46 equity shares and multiples thereafter. The issue consists of a fresh offer of 21 crore shares and an offer for sale (OFS) of approximately 26.6 crore shares, totaling Rs 15,512 crore.

The issue closes on Wednesday, 8 October, with allotment expected on Thursday, 9 October. Shares will be credited to successful bidders' demat accounts by Friday, 10 October, and listing is scheduled on the BSE and NSE for Monday, 13 October. This IPO is the largest of the year, the biggest ever from the Tata Group, and the largest by any non-banking financial company (NBFC) in India. Last heard, Tata Capital was commanding a grey market premium of Rs 24-26 per shares, suggesting nearly 8 per cent gains for the investors.

Tata Capital is the largest ever IPO from the Tata Group. However, it is the second IPO by Tata Group in a span of two years after Tata Technologies’ issue, which was launched in November 2023, raising Rs 3,042 crore from investors. Previous to this, Tata Group had launched the IPO of TCS in 2024.

Tata Capital is the largest ever primary offering by a non-banking financial company (NBFC) and fourth largest IPO in the history of Indian capital markets after Hyundai Motor India (Rs 27,850 crore), Life Insurance Corporation of India (Rs 20,550 crore) and One97 Communication (Rs 18,300 crore). Tata Capital is third largest NBFC with total gross loans of Rs 2.3 trillion as of June 2025.

Key Offer Details and Timeline
The IPO is a landmark for Indian capital markets, especially within the NBFC sector. The fresh issue comprises 21 crore shares, while the OFS includes up to 23 crore shares by Tata Sons Private Limited and 3.58 crore shares by International Finance Corporation.

Promoter and Selling Shareholders
In the offer for sale, Tata Sons Private Limited, the company's promoter, is offloading up to 23 crore shares, with the International Finance Corporation selling 3.58 crore shares, all with a face value of Rs 10 each.

Promoter Holding and Board Structure
Tata Sons, the promoter, holds 3,575,064,262 shares, accounting for 88.6 per cent of Tata Capital's issued, subscribed, and paid-up share capital on a fully diluted basis. The board consists of eight directors, including one executive director and seven non-executive directors. Of these, five are independent directors, with two women as independent directors. Saurabh Agrawal is the chairman and non-executive director, while Rajiv Sabharwal serves as managing director and CEO.

Company Background and Market Position
Tata Capital is the flagship financial services subsidiary within the Tata group, operating as a major NBFC. According to the CRISIL Report, Tata Capital ranks as the third-largest diversified NBFC in India, with total gross loans of Rs 2.3 trillion as of June 2025. The company's business spans retail, SME, and institutional lending.

Financial Performance and Growth Metrics
Tata Capital's financial results have shown consistent growth. Interest income increased from Rs 11,910.90 crore in FY23 to Rs 16,366.47 crore in FY24 and to Rs 25,719.77 crore in FY25. For Q1 FY26, interest income reached Rs 6,931.83 crore, up from Rs 5,995.16 crore year-on-year. Profit after tax rose from Rs 2,945.77 crore in FY23 to Rs 3,326.96 crore in FY24, and Rs 3,655 crore in FY25. Q1 FY26 profit was Rs 1,040.93 crore, compared to Rs 472.21 crore in the prior year.

IPO Objectives and Capital Utilisation
The net proceeds from Tata Capital's fresh issue will augment its Tier–I capital base and support future capital requirements, including onward lending. A portion of the proceeds will be directed towards meeting offer expenses.

Industry Peers and Competitive Landscape
Tata Capital faces competition from established NBFCs such as Bajaj Finance, Shriram Finance, Cholamandalam Investment and Finance Company, L&T Finance, Sundaram Finance, and HDB Financial Services.

Asset Quality and Risk Factors
The company’s Red Herring Prospectus highlights the risk associated with customer defaults, noting, "Our gross stage 3 loans comprised 2.1 per cent, 1.7 per cent, 1.9 per cent, 1.5 per cent, and 1.7 per cent of its total gross loans as at June 30, 2025, June 30, 2024, March 31, 2025, March 31, 2024 and March 31, 2023, respectively."

Unsecured Loans Credit Risk
Tata Capital also emphasises risk related to unsecured lending. The RHP states, "Unsecured loans pose a higher credit risk compared to our secured loan portfolio because they are not supported by realisable collateral that could help ensure an adequate source of repayment for the loan." As of June 2025, unsecured loans made up 20 per cent of the company’s gross loans, with similar percentages over recent periods.

Interest Rate Sensitivity
The company's results are sensitive to interest rate changes. As described in the RHP, "Changes in interest rates can significantly affect our earnings and associated key financial metrics, including net interest income (NII), net interest margin (NIM) ratio, cost-to-income ratio, return on assets (RoA), and return on equity (RoE), among others."

Analysts views
The issue is valued at a P/BV multiple of 3.4 times on post-issue capital. Tata Capital combines the strength of its Tata Group parentage, a diversified loan portfolio, robust risk management practices, and a pan-India omni-channel network to position itself as one of the most reliable and scalable NBFCs in India, said SBI Securities.

“The recent TMFL merger further expandsits presence in vehicle finance, adding scale and product diversity. During FY25 and 1QFY26, RoE and RoA have dipped due to losses from TMFL on a post-merger basis impacting profitability, which is expected to reverse in the future as the TMFL business turns profitable,” it added.

Tata Capital offers a resilient business model with a focus on sustained growth supported by a diversified asset mix, said ICICIDirect, keeping the issue unrated. However, its has cited declining provisioning buffers with PCR falling to 58.5 per cent in FY25, reducing cushion against potential credit losses amid a predominantly retail and SME portfolio along with substantial proportion of unsecured loans as key risks for it.

“We recommend to subscribe Tata Capital IPO with long term view,” said Kunvarji Finance. “Tata Capita, the Tata Group’s flagship financial services arm, leverages strong brand equity, a diverse loan portfolio, and wide distribution to drive long-term growth. The RBI’s recent rate cut is set to boost liquidity and reduce borrowing costs, further supporting its expansion,” it added.