Tata Group-Backed Company-Tata Capital’s Shares List on Dalal Street Above IPO Price

The stock market experienced a decline on Monday, with the Sensex and Nifty-50 falling by 0.30 per cent and 0.30 per cent, respectively. This downturn was attributed to the expected imposition of Donald Trump's tariffs on China starting on November 1, 2025. Despite the broader market weakness, shares of Tata Capital made a strong debut, listing at Rs 330 per share on both the BSE and NSE, above their IPO price.

Tata Capital Limited, the third-largest diversified NBFC in India by gross loans following its merger with Tata Motors Finance, is a key component of the Tata Group. Incorporated in 2007, the company offers a broad range of products, including retail, SME, corporate, housing and infrastructure finance. Operating through 1,516 branches across 27 States/UTs and serving 7.3 million customers, its omni-channel model and strong AAA ratings underpin a granular and diversified portfolio. The firm's strengths are rooted in its Tata Group parentage and pan-India network, positioning it robustly within the Indian financial sector.

The Indian NBFC sector is set for robust growth, projected to expand from Rs 48 trillion in FY25 to Rs 74–77 trillion by FY28 at a 15–17 per cent CAGR, driven by retail credit and MSME formalisation. Tata Capital is well-positioned to capitalise on this expanding Total Addressable Market (TAM) with its scale and prudent risk management. Financially, the company has shown significant growth, with Revenue from Operations nearly doubling from Rs 13,631 crore in FY23 to Rs 28,324 crore in FY25, while Net Profit grew from Rs 2,946 crore to Rs 3,655 crore over the same period, despite a moderation in profit margins post-merger.

The IPO, scheduled to open from October 6 to October 8, 2025, has an issue size of Rs 15,511.90 crore at a price band of Rs 310 – Rs 326 per share. The primary object of the Rs 6,846.00 crore fresh issue is to significantly augment the Tier-I capital base to support future asset growth. An Offer for Sale (OFS) of Rs 8,665.90 crore is also included, with proceeds going to existing shareholders. This capital augmentation is crucial for sustaining the company's aggressive growth trajectory while navigating the regulatory focus on Upper Layer (UL) NBFCs.

The company is valued at a P/E of 38x and a P/BV of 3.8x for FY25, which is generally comparable to major peers like Bajaj Finance and Cholamandalam Investment, although it is richer than L&T Finance. While its current Returns on Equity (ROE of 14.0 per cent) and Assets (ROA of 1.72 per cent) trail top-tier peers, this gap is expected to narrow. The company's management is confident that merger synergies, enhanced capital and expanding retail reach will normalise ROE toward 16–17 per cent, making its full valuation justified by improving operating metrics, high credit quality and the long-term growth runway of the Indian NBFC market.

Disclaimer: The article is for informational purposes only and not investment advice.