Tata Capital IPO: Should You Invest in India’s Largest Public Offering of 2025?

Tata Capital has launched its ₹15,512 crore Initial Public Offering (IPO), marking it as the largest public offering in India this year. The IPO opened on October 6 and will close on October 8, 2025. With a price band set between ₹310 and ₹326 per share, the minimum investment for retail investors is ₹14,260 for a lot size of 46 shares. The listing is expected on October 13.

Company Overview and Financials

Tata Capital, the financial services arm of the Tata Group, offers a range of products including retail, SME, and corporate loans, wealth management, and third-party financial products. As of June 2025, the company reported a net profit of ₹3,665 crore, up from ₹3,029 crore in FY23. Its net interest income nearly doubled to ₹10,690 crore, though the net interest margin remained stable at 5.1–5.2%, below peers like Bajaj Finance at 9.5% and Cholamandalam Investment & Finance at 7.8%. The company has a loan book of ₹2.33 lakh crore, making it India’s third-largest non-banking financial company (NBFC).

Subscription and Market Response

On the first day of the IPO, it was subscribed 19% overall, with strong demand from Qualified Institutional Buyers (QIBs). The Grey Market Premium (GMP) was modest at around 2.3% above the issue price, indicating cautious optimism among investors. Despite this, the IPO has attracted significant interest, with strong anchor investor participation.

Analyst Views and Investment Considerations

Analysts have mixed opinions on the IPO. Some recommend subscribing for the long term, citing Tata Capital’s diversified lending book, robust risk management, and strong parentage. Others note concerns such as a higher borrowing-to-equity ratio of 6.5x, indicating increased leverage, and rising credit costs, which could impact profitability. Additionally, the recent merger with Tata Motors Finance may affect year-on-year comparisons and introduce integration risks.

Conclusion

The Tata Capital IPO presents a significant opportunity for investors seeking exposure to a leading NBFC with a strong brand and diversified portfolio. However, potential investors should consider the company’s leverage, credit costs, and integration risks before making a decision. As the IPO progresses, monitoring subscription levels and market sentiment will be crucial for assessing its long-term investment potential.

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