Morgan Stanley, Nomura bet big on Tata Capital IPO; should you subscribe?

Tata Capital IPO opens for subscription: Check price band, lot size, GMP, reviews, allotment date, listing date, and other key details here

Tata Capital IPO: Global investment giants Morgan Stanley, Goldman Sachs, and Nomura are among the top institutional (Anchor) investors placing bets on the much-anticipated initial public offering (IPO) of Tata Group's flagship non-banking financial company (NBFC), Tata Capital, which opens for public subscription today, October 6.

 

Ahead of the public launch, the company raised ₹4,642 crore from anchor investors. State-owned insurance giant Life Insurance Corporation of India (LIC) emerged as the largest participant, securing 15.08 per cent of the anchor allocation, amounting to an investment of ₹700 crore. The anchor book also saw strong participation from other institutional investors, including ICICI Prudential Mutual Fund, Nippon India MF, Motilal Oswal MF, Amansa Holdings, and Government Pension Fund Global.

 

 

As the Tata Capital IPO opens for subscription today, the grey market trends suggest decent sentiment for the public offering. Sources tracking unofficial market activity revealed that the unlisted shares of Tata Capital were exchanging hands at around ₹333.50 per share, reflecting a grey market premium (GMP) of ₹7.50 per share—or nearly 2.30 per cent—over the upper price band of ₹326.

 

Meanwhile, brokerages remain optimistic about Tata Capital’s long-term growth prospects and have broadly recommended investors to subscribe with a long-term investment perspective, citing that the issue appears fairly valued.

Is it good to invest in Tata Capital IPO? Here’s what the brokerages recommend:

Anand Rathi Research – Subscribe for long-term

Analysts at Anand Rathi Research have recommended the investors to subscribe to Tata Capital IPO for a long-term horizon, citing that the public offering is fairly priced. The analysts pointed out that at the upper price band, the company is valuing at P/E of 32.3x, P/B of 3.5x to its FY25 earnings, and market cap of ₹13,83,827 million post-issue of equity shares. "We believe that the IPO is fully priced and recommend a “Subscribe Long Term” rating to the IPO," wrote the analysts in a research note.

Canara Bank Securities – Subscribe for long-term

Analysts at Canara Bank Securities have also recommended the investors to subscribe to Tata Capital IPO for a long-term horizon, citing that the issue is priced at 4x FY25 P/B, which is in line with peers. The analysts believe the company is well-positioned in India’s growing NBFC sector, with strong potential in retail and SME lending supported by digital innovation. Its diversified portfolio, Tata brand trust, prudent liability management, superior asset quality, and AI-enabled “phygital” model, they said, underpin long-term growth.

 

"Post-merger integration impacts from Tata Motors Finance are expected to normalise, supported by AAA ratings and a resilient funding profile. Macro tailwinds like India’s economic growth and digital adoption favour the business, though risks include regulatory changes, rate volatility, and competition. Recommendation: Subscribe for long-term horizon," said the analysts. 

ICICI Direct – Unrated

Analysts at ICICI Direct have assigned an 'Unrated' rating on the public offering, citing that Tata Capital offers a resilient business model with a focus on sustained growth supported by a diversified asset mix. "The company currently commands a valuation of 3.5x P/B on post-issue basis (ex-ESOP). We assign an Unrated rating," wrote the analysts in a research note.

Deven Choksey Research – Neutral

Brokerage firm Deven Choksey Research, in a research note, has assigned a Neutral rating on the public offering. According to the report, Tata Capital’s initial issue is priced at 4.1x TTM P/B, compared to the peer average of 3.7x TTM P/B. On comparing its valuation and return profile of 4.1x P/B and 1.9 per cent RoA, compared to peer average of 3.7x P/B and 3.0 per cent RoA, it appears fairly valued. 

"Although we believe that it will be able to scale its loan book at a healthy pace, driven by its omni-channel presence and strong parentage, its returns appear low compared to other listed NBFCs. We assign a “Neutral” rating to the issue," said the brokerage in its report.

Tata Capital IPO details

Tata Capital IPO comprises a fresh equity issue of 210 million equity shares worth ₹6,846 crore, along with an Offer for Sale (OFS) with promoter Tata Sons and shareholder International Finance Corporation (IFC) divesting up to 265.8 million equity shares worth ₹8,665.87 crore.

 

The public issue is being offered at a price band of ₹310–326 per share with a lot size of 46 shares. Thus, the investors can bid for a minimum of 46 shares and in multiples thereof. A retail investor would need ₹14,996 to bid for one lot of 46 shares, while ₹1,94,948 is required to bid for a maximum of 13 lots of 598 shares.

 

Tata Capital IPO will remain available for subscription till October 8, following that the basis of allotment of the company’s shares is likely to get finalised on October 9, and shares will be credited into the demat account by October 10.

 

Tata Capital shares are slated to make their D-Street debut tentatively on October 13.

 

Tata Capital has informed that it will not receive any proceeds from the offer for sale, which will be given to the promoters and shareholders participating in OFS. The company, however, proposes to use the proceeds from the fresh issue towards augmentation of the company’s Tier-I capital base to meet its future capital requirements, including onward lending, which are expected to arise out of the growth in the company’s business, and to ensure compliance with regulatory requirements on capital adequacy prescribed by the RBI from time to time.

About Tata Capital

Tata Capital Ltd (TCL), a subsidiary of Tata Sons Pvt. Ltd. and the flagship financial services arm of the Tata Group, is the third-largest diversified NBFC in India with Total Gross Loans of ₹2.3 trillion as of Jun’25. Through a suite of more than 25 lending products, TCL serves a broad customer base, with a focus on retail and SME customers, which together constitute 87.5 per cent of its Total Gross Loan Book as of Jun’25. The company operates on an omni-channel distribution model, blending physical presence with digital scale. It has a nationwide branch network of 1,516 branches across 27 states and UTs, supported by 30,000 DSAs, 400 OEM partnerships, and over 60 digital sourcing partners.