Tata Capital IPO Fully Subscribed On Day 3; Analysts Flag Limited Listing Gains
Grey market shows only a 1.84% premium, indicating cautious sentiment.
The much-anticipated initial public offering (IPO) of Tata Group’s non-banking financial company (NBFC), Tata Capital, has been fully subscribed on the third day, as per data on the BSE.
Investors bid for 34,47,10,292 shares, compared to 33,34,36,996 shares on offer, as per BSE data at 12:10 a.m. IST. Qualified Institutional Buyers (QIBs) have bid 1.28 times the total shares on offer, Non Institutional Investors (NIIs) at 1.19 times, while Retail Individual Investors’ (RIIs) bids stand at 0.86 times.
Grey Market Signals
According to reports, the IPO shares are currently trading at a premium of ₹6 in the grey market, translating to around 1.84% over the upper price band.
Analysts Take: Skip
The Tata Capital IPO has seen a cautious start despite the Tata brand’s strong backing. Investor response has been tepid, with subscription levels below expectations, noted SEBI-registered analyst Pradeep Carpenter.
Several factors are contributing to the muted interest. The issue price of ₹310 – ₹326 per share offers limited scope for listing gains, while the grey market premium remains modest. A crowded IPO calendar, rising funding costs, lower provisioning buffers, exposure to unsecured loans, and a large Offer-for-Sale (OFS) component have also tempered enthusiasm, the analyst said.
Given the current trend, Tata Capital may witness a modest or flat listing unless demand picks up sharply before closure. Short-term investors may be disappointed, but long-term investors could find comfort in the Tata Group’s credibility and diversified lending portfolio, he added.
The subdued debut could also have a temporary impact on other NBFC stocks such as Bajaj Finance, L&T Finance, and Muthoot Finance.
Overall, the IPO reflects investor caution toward valuations, showing that brand reputation alone may not drive exuberance in a risk-aware market, Carpenter added.
The total issue size is ₹15,512 crore, with 35% reserved for retail investors, and the grey market premium currently shows no significant indication, said SEBI RA Aditya Hujband.
“I am not applying for this IPO,” Hujband said.
Aggressive investors may consider participating for long-term gains or wait to invest after quarterly results are released following the listing, he added.
IPO Details
Tata Capital aims to raise ₹15,511.87 crore through the IPO, which includes a fresh issue of ₹6,846 crore and an offer for sale (OFS) of ₹8,665.87 crore. It is touted as the biggest IPO in India so far this year, with its shares priced in a band of ₹310 – ₹326.
Investors can bid in multiples of one lot, comprising 46 equity shares. The IPO allotment is expected on October 9, with the listing likely to occur on October 13.
MUFG Intime India is the registrar for the issue. The book-running lead managers include Kotak Mahindra Capital, BNP Paribas, Citigroup Global Markets India, HDFC Bank, HSBC Securities & Capital Markets (India), ICICI Securities, IIFL Capital Services, JP Morgan India, SBI Capital Markets, and Axis Capital.
On October 3, Tata Capital raised around ₹4,641.8 crore from 135 anchor investors, with Life Insurance Corporation (LIC) as its largest anchor investor.
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