A day after debut, Tata Capital stock dips below issue price; down 2% today

Tata Capital shares declined 2.4 per cent to ₹322.55 on the BSE, falling below its issue price of ₹326 in Tuesday's intraday trade

Tata Capital share price today

 

Tata Capital share price declined 2.4 per cent to ₹322.55 on the BSE today, falling below its issue price of ₹326. On the National Stock Exchange (NSE), the stock hit a low of ₹322.20 in Tuesday's intraday deal.

 

Till 1:13 PM, a combined 21.01 million equity shares of Tata Capital had changed hands on the NSE and BSE. By comparison, the BSE Sensex was down 0.55 per cent at 81,874 at that time.

 

The market price Tata Capital, a diversified financial services company and a subsidiary of Tata Sons, made a flat debut on Dalal Street on Monday, October 13, 2025. The company's stock opened at ₹330 on the BSE, ₹4 higher over the issue price of ₹326. The stock ended the first trading session at ₹330.40.  READ STOCK MARKET UPDATES LIVE

 

Tata Capital: Business overview and outlook

 

Tata Capital is registered as a non-banking finance company (NBFC), offering a wide range of financial products and services to retail, corporate, and institutional customers. As of June 2025, asset under management (AUM) stood at ₹2.3 trillion, catering to a wide customer base of 7.3 million. The company has 1,516 branches across 1,109 cities in India.

 

Analysts, however, caution against a declining provision buffers with the coverage ratio (PCR) falling to 58.5 per cent in FY25. This, they said, reduces cushion against potential credit losses amid a predominantly retail and SME portfolio (87.5 per cent of loans).

 

"Substantial proportion of unsecured loans (~20 per cent) and growing NTC customers (~3.5 per cent) pose underwriting risk resulting in volatile performance," ICICI Securities had said in its IPO note.

 

Further, Tata Capital's average cost of borrowings rose to 7.8 per cent in FY25 from 6.6 per cent in FY23, indicating rising pressure on funding costs. Sustained increases in borrowing costs could weigh on NIMs and profitability, particularly in a competitive lending environment. Moreover, the company's ability to raise funds on favourable terms depends heavily on maintaining strong credit ratings and investor confidence.

 

Any downgrade in ratings or tightening of market liquidity could constrain access to capital, raise refinancing risks, and adversely impact liquidity, growth momentum, and overall financial performance, the brokerage firm said.  ALSO READ | LG Electronics India lists at 50% premium, Mcap at ₹1 trn; analysts bullish

JM Financial initiates coverage on Tata Capital with 'Add' rating, target price of ₹360

 

Domestic brokerage JM Financial has initiated coverage on Tata Capital with an 'Add' rating, citing its strong growth profile and backed by the Tata Group. The brokerage values the stock at ₹360, based on 2.9x FY27E P/B. It highlighted that around 80 per cent of the company's loan book is in secured segments, with retail finance contributing 61 per cent.

 

"Tata Capital has a highly diversified product mix, offering more than 25 distinct lending products broadly classified into three businesses: 61 per cent of its loan book comprising retail finance, 26 per cent SME and 13 per cent corporate loans. With the highest credit rating of 'AAA/Stable', Tata Capital enjoys easy access to funds at lower interest rates. However, higher share of secured loans and greater competition from banks in Tata Capital's segments lead to lower-than-peers NIMs of ~5-5.5 per cent which along with lower credit cost, gets translated into RoA of ~2.1-2.5 per cent (in FY23/FY24)," analysts at JM Financial Institutional Equities said.

 

The brokerage firm expects Tata Capital to deliver AUM CAGR of 20 per cent during FY25-27E with largely steady opex and gradual decline in credit costs post FY26E resulting in FY25-27E PAT CAGR of ~34 per cent during FY25-27E translating into average RoA/RoE of 1.9 per cent/13.2 per cent over FY26E/FY27E.

 

Analysts value the company at 2.9x FY27E P/B based on its growth/RoE profile and benchmarking done against its closest peers like HDB Financial Services and Cholamandalam Investment and Finance Company.