Tata Capital’s $2 Billion IPO: Dates, Valuation, Risks

IPO Dates & Size: Tata Capital’s IPO will open for subscription on October 6, 2025 (anchor bids Oct 3) and close on Oct 8 ^[1] ^[2]. It is a mega issue of 47.58 crore shares (face value ₹10), raising about ₹17,200 crore (≈$2 billion) ^[3] ^[4]. This makes it one of the largest financial-sector IPOs in recent years.
Share Breakdown: The offer includes 21.00 crore new shares (fresh issue) and 26.58 crore offer-for-sale (OFS) shares ^[5]. Promoter Tata Sons will sell 23.00 crore shares and the World Bank’s IFC will sell 3.58 crore shares of that OFS ^[6].
Valuation & Use of Funds: Tata Capital is targeting a post-IPO valuation around $16–18 billion (over ₹1.45 lakh crore) ^[7] ^[8]. The funds raised will bolster the company’s Tier-1 capital for lending and growth ^[9] ^[10]. (By comparison, the last big NBFC IPO – HDB Financial Services – raised ₹12,500 crore in June 2025 ^[11].)
Regulatory Context: RBI regulations require upper-layer NBFCs like Tata Capital to list within three years of classification. Tata Capital was tagged “upper-layer” in Sept 2022, so it must list by Sept 2025 ^[12]. This IPO complies with that mandate.
Share Price & Sentiment: After hitting ~₹1,125 unlisted in April, Tata Capital’s grey-market share price has slid about 35% to ~₹735 ^[13]. Analysts note that grey-market and unlisted prices (above ₹900–₹1,000 per share) may not hold; some expect the final IPO price to be around ₹400 ^[14] ^[15]. This gap highlights high expectations but also caution among investors.

IPO Details: Structure and Timeline

Tata Capital’s draft prospectus (filed Sep 26, 2025) confirms the offer opens Oct 6 and closes Oct 8, with anchor bids on Oct 3 ^[16] ^[17]. The issue is being managed by a consortium of banks (including Kotak Mahindra, Axis, HDFC Bank, etc.) ^[18].

Per regulatory filings, the fresh issue is up to 210 million shares and the OFS up to 265,824,280 shares ^[19] (equivalently 21.0 cr and 26.58 cr). Tata Sons is divesting 23.0 cr, IFC 3.58 cr in the OFS ^[20]. The combined IPO size (fresh + OFS) is about $1.85–1.9 billion (₹16,400–17,200 cr) ^[21].

Tata Capital’s promoters will use the fresh issue to “augment Tier-1 capital base… including onward lending,” strengthening the balance sheet ^[22] ^[23]. Tata Group insiders indicate a target valuation of roughly $16.5–18 billion (about ₹146,000–1,48,000 cr) ^[24] ^[25]. If achieved, this would make Tata Capital one of India’s most valuable NBFCs.

Corporate & Financial Profile

Tata Capital is the flagship financial-services arm of the Tata Group, providing loans, housing finance (via Tata Housing Finance subsidiary), insurance distribution, wealth management and more. As of FY2024–25, it reported revenue of ₹28,313 crore and profit after tax of ₹3,655 crore ^[26], up from ₹3,327 cr in FY2023. Its loan book has been growing (~40% YoY), though non-performing assets (NPAs) are rising (gross NPA ~2.33% in FY25) ^[27]. The company is well-capitalized (CARA ~18.5%) and serves ~70 lakh customers with 25+ lending products ^[28] ^[29].

The IPO also marks Tata Group’s second major listing in recent years (after Tata Technologies in Nov 2023 ^[30]). Regulators compelled upper-layer NBFCs like Tata Capital to go public by end-September 2025 ^[31]. In line with this, Tata Capital filed confidential draft papers in April 2025 and obtained SEBI approval by July ^[32].

Comparison & Market Context

Tata Capital’s IPO will be the largest financial-sector listing since the Hyundai Motor India IPO (~$3.3B, ₹27,870 cr in Oct 2024) ^[33]. It surpasses recent NBFC IPOs:

HDB Financial Services (HDFC Bank’s NBFC arm): ₹12,500 cr IPO in June 2025; the stock debuted ~9% above issue price.
Bajaj Housing Finance: ₹3,357 cr IPO in Sept 2024; surged ~135% on day 1 ^[34].
These successes reflect strong demand for retail/NBFC stories. For perspective, SBI Mutual Fund had raised ₹12,000 cr via a pre-IPO placement of Tata Capital shares, hinting at confidence in the business ^[35].

However, UnlistedZone analysts caution that Tata Capital’s current unlisted valuation is very rich. They note Tata Capital’s implied P/E (~116x) and P/B (~10.7x) far exceed peers (e.g. Bajaj Finance ~34x, 6x) ^[36]. With the IPO expected near ₹400 (valuing the company ~₹1.48 lakh cr), early unlisted buyers (who paid ~₹1,050) could incur losses ^[37] ^[38]. In short, the IPO is a “marquee” event, but its pricing will test optimistic assumptions.

Expert Commentary & Outlook

Market experts highlight that broader IPO sentiment will influence Tata Capital’s offering. Arpit Jain of Arihant Capital Markets notes that “the success of these IPOs will depend on factors like market conditions, investor sentiment, regulatory approvals, and valuation” ^[39]. Bonanza Research’s Khushi Mistry adds that strong liquidity and retail interest (“ample liquidity and investor appetite”) are expected to keep IPO momentum high through year-end ^[40].

On valuations, analysts urge caution. Kotak Securities observes that grey-market Tata Capital shares (~₹900–1,000) may be overextended; they suggest the public issue might price closer to ₹400 per share ^[41]. This aligns with UnlistedZone’s view that pricing discipline is key, lest early private investors suffer large notional losses ^[42]. Ultimately, success will hinge on whether the IPO can deliver a convincing growth story at a steep price.

Conclusion

Tata Capital’s IPO is a landmark event – a multi-billion-dollar sale by one of India’s most trusted groups, timed to meet RBI listing rules. Its size, Tata brand backing, and robust financials give it broad appeal. However, the gap between hype and realistic pricing is stark. Investors will watch carefully: if the issue is bid well above ₹400 (implying the $16–18B valuation) it will be a strong signal of confidence; if demand wavers, it could reset hopes for similarly priced IPOs. As one market watcher puts it, Tata Capital’s debut embodies both the promise and the caution of India’s IPO boom ^[43] ^[44].

Sources: Reputable financial press and company filings ^[45] ^[46] ^[47] ^[48] ^[49], including Times of India, Moneycontrol, Financial Express, ET BFSI, Kotak Securities, and expert analyses. All figures and quotes are drawn from these current reports.