Tata Capital IPO: Tata Group firm reports strong Q1 show; stock fall 40% from peak

Shares of IPO-bound Tata Capital continue to remain hammered even as the company announced a strong set of numbers in the June 2025 quarter. The stock has fallen 40 per cent from its peak amid the ongoing IPO buzz, which is said to be launched in the first half of September 2025.

Tata Capital reported more than doubling of its consolidated net profit to Rs 1,040.93 crore for the quarter ended June 2025, rising 120 per cent on a year-on-year (YoY) basis. The non-banking financial company (NBFC) had reported a profit of Rs 472.21 crore in the year ago period.

The net interest income (NII) of the Tata Group-backed shadow lender surged 16.8 percent to Rs 2,866.2 crore in the reported quarter, up from Rs 2,454 crore a year ago. Total income of Tata Group-backed company rose 17.29 per cent YoY to Rs 7,691.65 crore for the quarter under review from Rs 6,557.40 crore in the April-June quarter of FY2025, it said in the exchange filing.

Despite the strong set of numbers, shares of Tata Capital continue to remain in doldrums as the stock is exchanging hands around Rs 725-750 in the unlisted market, falling nearly 40 per cent from its recent high at Rs 1,200. The stock has been marred by its steep-low rights issue price and expectations of price band-around it.

According to dealers of the unlisted space, Tata Capital may issue its shares in the range Rs 400-500 apiece during the IPO, suggesting that IPO is likely to be launched at a steep discount from the unlisted market levels. They cite the rights issue price as the benchmark for the IPO price-band.

Hitesh Dharawat, co-founder of Mumbai based boutique firm Dharawat Securities said that Tata Capital IPO should offer share around or slightly above the rights issue price but the activity has sharply reduced in the unlisted market. "Tata Capital shall draw a strong investor interest considering the Tata brand name, solid fundamentals and sound business profile," he said.

According to the updated draft papers (DRHP), Tata Capital's proposed IPO shall cumulatively include 47.58 crore shares, including a fresh issue of 21 crore equity shares and an offer for sale (OFS) of 26.58 crore shares. The company shall be raising around Rs 17,000 crore via IPO, as per the sources.

Tata Capital had raised a total of Rs 1,751.85 crore via rights issue. The company issued 5,10,74,292 equity shares at an issue price of Rs 343 apiece. The rights issue was approved by the company board in June 2025, and the issue was open for subscription between July 4-13. The rights entitlement ratio has been set in the 1:78 ratio.

Divyanshu Aggarwal, Director at Delhi-based Growfast Securities & Credit suggested that investors should avoid Tata Capital shares from the unlisted space for now and may look at the IPO or post listing. "The stock is richly priced at current pre-IPO levels and we do not see an IPO price around Rs 550-600."

If successful, Tata Capital IPO will become the largest public issue in India's financial sector. It will also mark the Tata Group's second public listing in recent years, following the debut of Tata Technologies in November 2023. Tata Capital was designated as an upper-layer NBFC in September 2022 and its deadline to launch IPO expires on September 30, 2025.