Sat Oct 04 10:20:00 UTC 2025: ## Tata Capital’s Massive IPO: Worth the Hype?

**Mumbai, India – October 4, 2024** – Tata Capital, the financial services arm of the Tata Group, is set to launch its highly anticipated ₹15,512 crore Initial Public Offering (IPO) on Monday, October 6th, closing on October 8th. This marks one of the largest IPOs of 2025 and has drawn considerable attention from investors.

The IPO comprises a fresh issue of ₹6,846 crore to bolster the company’s Tier-I capital, a financial cushion required by the Reserve Bank of India (RBI) to absorb potential loan defaults. Additionally, a significant portion of ₹8,666 crore is an offer for sale, allowing existing shareholders Tata Sons and International Finance Corporation to offload a portion of their stake. Post-IPO, promoter holding will decrease from 95.6% to approximately 85.5%.

Tata Capital has grown into India’s third-largest diversified NBFC, with ₹2.33 lakh crores in assets under management. In FY25, the company reported revenue of ₹28,300 crores, showcasing a robust 44% compound annual growth rate (CAGR) over the past two years. While profits remain healthy at ₹3,655 crores, key metrics like Net Interest Margin (NIM), Return on Equity (ROE), and Return on Assets (ROA) trail behind industry averages.

Despite having a stable asset quality, the company faces risks associated with a significant portion of unsecured loans and 283 pending criminal cases relating to loan disputes, repossession and alleged foul play by the company.

At the upper end of the price band of ₹326 per share, Tata Capital’s valuation appears comparatively high, with a P/E ratio of 33 and a P/B ratio of 4.2, versus the average P/E of 27.2 and P/B of 3.6 of competitors.. Given the flurry of recent mega-IPOs that have underperformed and the upcoming LG Electronics IPO, investors may find themselves stretched thin. Analysts suggest that the allure of the Tata brand may be a key factor driving subscription, rather than immediate gains.

Investors should carefully consider these factors before subscribing to the IPO.

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