Tata Capital IPO subscribed 40% on Day 1 amid strong anchor demand

Tata Capital's ₹15,512-crore IPO sees healthy Day 1 response with ₹4,200 crore bids; LIC, top mutual funds, and global investors feature among key anchors

Tata Capital’s initial public offering (IPO) was covered almost 40 per cent on Monday when the year’s largest offering opened for public bids.

 

The share sale attracted bids for 129 million shares worth ₹4,200 crore as against 333.4 million on offer.  The institutional investor portion of the IPO was subscribed 52 per cent, high net worth individual portion almost 30 per cent and retail portion 35 per cent. The IPO attracted nearly 700,000 applications.

 

On Friday, the Tata group firm had allotted 142.4 million worth ₹4,641 crore shares to anchor investors  The shares were allotted ₹326 apiece, the top-end of the price band.

 

Among the prominent anchor investors, the Life Insurance Corporation of India (LIC) received the largest allotment of over 21.4 million shares, committing close to ₹700 crore. Other notable mutual fund (MF) participants included ICICI Prudential MF, HDFC MF, Aditya Birla Sun Life MF, and DSP MF. Foreign institutional investors such as Morgan Stanley, Goldman Sachs, and State of Michigan Retirement System also bid in the anchor category. 

 

At the upper price band, Tata Capital is valued at ₹1.38 trillion, 3.5 times its book value. 

 

“With a focus on retail and housing segments, conservative leverage, and sound asset quality, Tata Capital is well-positioned to sustain growth momentum and capture opportunities in India’s expanding financial ecosystem,” said Ventura Securities in a note.

 

Tata Capital’s ₹15,512-crore IPO is the fourth largest in the domestic market and the largest-ever Non-Banking Finance Company (NBFC)

 

The IPO comprises a fresh issue of shares worth ₹6,846 crore, which will be used to augment the company's capital base. Additionally, promoter Tata Sons and the International Finance Corporation (IFC) are offloading shares worth ₹8,666 crore. Following the IPO, the promoter holding of Tata Capital will decline from 95.6 per cent to 85.5 per cent.

 

Tata Capital’s IPO is the largest public offering ever from the Tata group and the second from the conglomerate in nearly two decades, following Tata Technologies in November 2023.

 

Tata Capital is classified as an "upper layer" NBFC by the Reserve Bank of India (RBI) and hence was mandated to list.