The Indian IPO market is gearing up for one of its most anticipated issues this year—the Tata Capital IPO. Backed by the trusted Tata Group, this public offering is raising around ₹15,511 Crore, making it one of the largest IPOs in the financial services sector. Beyond its scale, the listing marks a regulatory milestone and signals the Tata Group’s commitment to building its financial services arm into a market leader.
Here’s a deep dive into Tata Capital, its business model, financial performance, IPO details, and what it means for investors.
Company Overview
Tata Capital Limited (TCL) is the financial services arm of the Tata Group, incorporated in 2007. Registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit Accepting NBFC (NBFC-ND-SI), it offers a wide range of financial products and services to retail, corporate, and institutional clients.
Its offerings include:
- Retail Lending: Personal loans, home loans, vehicle loans (including used-car loans), consumer durable financing.
- Wholesale Lending: Working capital, term loans, structured finance, infrastructure finance.
- Wealth Management & Distribution: Investment advisory, mutual fund distribution, insurance.
- Housing Finance: Through Tata Capital Housing Finance Ltd.
Over the years, Tata Capital has built a reputation for trust, transparency, and customer focus, leveraging the Tata brand’s strong equity.
Industry Context
India’s NBFC sector has been a growth engine for financial inclusion, catering to segments under-served by traditional banks. With credit penetration still relatively low compared to global benchmarks, the scope for growth remains vast.
Key industry tailwinds:
- Regulatory Push for NBFCs: RBI’s scale-based regulation has categorized large NBFCs like Tata Capital into the “upper layer,” requiring stronger compliance and public listing.
- Credit Demand Across Segments: Growing middle class, SME expansion, and digital adoption are driving retail and corporate loan demand.
- Shift Towards Used Vehicle Financing: With affordability driving consumer choices, used-vehicle financing is seeing strong uptake.
- Digital Transformation: NBFCs are investing heavily in technology for credit assessment, disbursement, and collections.
Tata Capital stands to benefit from all of these trends, given its diversified offerings and strong brand.
Business Strengths
- Tata Group Backing
The Tata name carries immense trust, giving Tata Capital a natural advantage in attracting customers, employees, and investors. - Diversified Portfolio
Unlike niche NBFCs, Tata Capital operates across retail, corporate, housing, and wealth management, spreading risk across verticals. - Strong Customer Base
Over 4 million customers across India, including retail borrowers, SMEs, and corporates. - Housing Finance Growth
Its housing finance arm contributes significantly to the loan book, supported by India’s real estate demand. - Digital Enablement
Investments in digital lending platforms and fintech collaborations are improving underwriting and reducing costs.
Risks and Challenges
While the fundamentals are strong, investors must keep an eye on certain risks:
- Credit Costs Rising: Post-merger with Tata Motors Finance, gross NPA levels and credit costs have ticked up. In FY24, credit costs rose from ~0.4% to ~1.4%.
- Competition: From banks, fintechs, and established NBFCs like Bajaj Finance, Shriram Finance, and HDB Financial Services.
- Economic Cyclicality: NBFC performance is tied to economic cycles, especially in vehicle financing.
- Regulatory Oversight: As an upper-layer NBFC, compliance costs will rise.
Financial Performance
Based on the DRHP:
- AUM (Assets Under Management): Crossed ₹1.6 lakh crore as of FY24.
- Revenue Growth: Consistently strong double-digit growth over the last three years.
- Profitability: Net profit for FY24 stood above ₹2,000 crore, reflecting healthy margins despite higher credit costs.
- Capital Adequacy: Maintains strong CAR (Capital Adequacy Ratio) above regulatory requirements, ensuring balance sheet strength.
The company’s focus on used vehicle loans is noteworthy. Currently ~30% of its vehicle finance book, Tata Capital plans to push this to ~50%, given higher yields and lower new-vehicle sales growth.
Tata Capital IPO Details
PO Details
|
Detail |
Information |
|
Opening Date |
6 Oct 2025 |
| Closing Date | 8 Oct 2025 |
| Price Band | ₹310 – ₹326 per share |
| Issue Size | ₹15,511.87 Crore |
| Lot Size | 46 shares per lot |
| Minimum Investment (Retail) | ₹14,996 (at upper price band) |
| Listing Exchanges | BSE & NSE |
| Expected Listing Date | 13 Oct 2025 |
Source: RHP | Chittorgarh
Valuation Expectations: Analysts peg a valuation of around ₹1.3–1.4 lakh crore, putting Tata Capital among the top NBFCs by market cap.
Tata Capital Ltd – GMP Details
Ahead of the opening, the Grey Market Potential (GMP) of Tata Capital IPO stood at ₹28 as of Sep 29th 2025 04:58 PM. The estimated listing price is expected to be ₹354 based on the upper price band of ₹326. The expected percentage gain per share is 8.59%.
| Source: Investorgain Media Report dated September 29, 2025
Disclaimer: The GMP (Grey Market Premium) price is an unauthenticated market related news and has no discernible basis. The same quoted above is as per news appeared in the media report and is for information purposes only. The investor shall do their own study/research before using the same for taking any decision to invest. We neither engage in, trade, or deal in the grey market nor we recommend or endorse trading in the grey market. |
Investor Sentiment
The IPO is seen as a landmark event for three reasons:
- Tata Group Financial Arm: The Group’s only large financial services vehicle going public.
- Regulatory Compliance: First large NBFC IPO under RBI’s new scale-based framework.
- Large Size: Among the biggest IPOs of the year, likely to attract strong institutional participation.
Retail investors are also expected to show keen interest, given the Tata name and the company’s strong consumer-facing businesses.
Valuation & Peer Comparison
Tata Capital will be compared with peers like:
- Bajaj Finance (market leader in retail NBFC)
- Shriram Finance (vehicle and SME lending)
- Muthoot / Manappuram Finance (gold-focused NBFCs)
While Bajaj Finance commands premium valuations due to its stellar track record, Tata Capital’s diversified model, brand trust, and growth potential may help it secure a valuation closer to the top tier.
Conclusion
The Tata Capital IPO is shaping up as a watershed moment for India’s financial markets. For the Tata Group, it’s about showcasing its financial services ambitions. For investors, it’s a chance to own a piece of one of India’s most trusted brands in a sector that remains critical to economic growth.
The opportunity is big—but so are the risks. Rising credit costs, intense competition, and economic sensitivity are factors to consider. Still, with its diversified business, strong parentage, and market positioning, Tata Capital is likely to command significant attention—and demand—when it opens for subscription in October.
Source: DRHP, RHP
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