Tata Capital is getting ready for its Initial Public Offering (IPO), which means that more people want to buy shares that haven’t been issued yet. This is its third rights issue in the last three financial years. Tata Capital’s board has accepted the IPO plan and a rights issue worth ₹1,504 crore. This has made investors more interested in the pre-IPO markets, which has caused share prices to rise.
Tata Capital IPO and Rights Issue Details
The exchange statement says that Tata Capital’s IPO will include both a new sale of up to 23 crore equity shares and an offer-for-sale (OFS) by some current shareholders. But the IPO start depends on how the market is doing, whether the government gives the go-ahead, and other important factors.
Tata Capital has also launched a rights issue worth ₹1,504 crore. The record date for this issue is February 25, 2025. Before this, there were two rights issues in FY23 and FY24, with prices of ₹162.90 and ₹188.40 per share.
Surge in Unlisted Share Prices
After the IPO was announced, unlisted market sellers said that the prices of Tata Capital shares went up sharply. The price of the stock went up by 25 to 30 percent, from ₹800 to ₹1,050. But experts warn that the company is currently worth more than it is worth.
𝗧𝗜𝗖 𝗦𝗵𝗮𝗿𝗲 𝗣𝗿𝗶𝗰𝗲 𝗥𝗶𝘀𝗲𝘀 𝟳.𝟭𝟴% 𝘁𝗼 𝗥𝘀 𝟲,𝟭𝟳𝟮.𝟯𝟬 𝗔𝗳𝘁𝗲𝗿 𝗧𝗮𝘁𝗮 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗜𝗣𝗢 𝗡𝗲𝘄𝘀
Tata Investment Corporation’s stock surged 7.18% to ₹6,172.30 on February 25, 2025, outperforming its sector by 6.84%. The stock opened at ₹5,850 and… pic.twitter.com/G22TPCZBLR
— Analytics Insight (@analyticsinme) February 25, 2025
Co-founder of Dharawat Securities Hitesh Dharawat said that Tata Capital’s share price went up after the board meeting was announced. He thinks the stock is too expensive, even at ₹800, and thinks the IPO price will be around ₹400.
Abhay Doshi, co-founder of UnlistedArena, agreed with these points of view. He said that Tata Capital has good parentage, but its current valuation seems high. He also thinks the IPO price will be around ₹400.
Tata Capital’s Growth and Financial Performance
Tata Capital is a non-banking financial company (NBFC) that has been around since 2007 and offers different types of loans, such as personal and home loans. The Reserve Bank of India (RBI) called the company a “upper layer” NBFC in September 2022. Upper-level NBFCs must be listed within three years, according to RBI rules. This means that the IPO has to happen by September 2025.
Tata Capital recorded a 7.7% year-over-year (YoY) increase in net profit to ₹932.09 crore for the quarter ending December 31, 2024. Revenue grew 21.73% YoY to ₹5,943.75 crore. Tata Capital made its biggest net profit ever in FY24, ₹3,150 crore, which is 37% more than the previous year. The company had a credit cost of 0.5% and a return on equity (RoE) of 17.6%.
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Tata Capital’s Ownership and Merger Plans
For the month of March 2024, Tata Sons owned 92.83% of Tata Capital. The other 10.87% was owned by other Tata Group companies and trusts. Tata Consumer Products, Tata Chemicals, Tata Motors, and Tata Power are some of the company’s biggest shareholders. Together, they own 2.4% of the business.
RBI gave the go-ahead for Tata Capital and Tata Motors Finance Ltd (TMFL) to join in October 2024. With this move, India will likely have its 12th biggest NBFC. Tata Capital’s loan book reached ₹1.6 lakh crore, up 35% year over year in FY24.
Market Impact
Tata Investment Corporation shares, which are an investment part of the Tata Group, went up 10% on February 25 after going down for two days. But shares of Tata Chemicals, Tata Motors, and Tata Power all went down in price.
Conclusion
Tata Capital’s IPO is likely to be a big deal in the market because it has done well financially and is backed by Tata Group. But experts warn that prices in the private market should not go up too much. Investors will be paying close attention to the IPO price and market factors before it goes public in September 2025.
