Tata Capital IPO GMP Falls to ₹7.5, Brokers Still Urge Subscription

On Tata Capital IPOMumbai, the grey market premium (GMP) slipped to ₹7.5 per share – just a 2.3% cushion above the top of the ₹310‑₹326 price band – prompting a mixed reaction across the market. While the dip suggested modest listing gains, five leading brokerages kept the buy recommendation alive, betting on the strength of the parent group and the NBFC’s growing loan book.

Background and Size of the Offering

Tata Capital Limited, a diversified non‑banking finance company headquartered in Mumbai, launched a ₹15,511‑crore IPO on October 6, 2025. The issue comprised a fresh issue of ₹6,846 crore and an Offer for Sale (OFS) of ₹8,666 crore by its promoter, Tata Sons Private Limited. The capital raise aimed to fund expansion in retail loans, housing finance and wealth‑management services, adding to a customer base that now exceeds 4 million.

Historically, Tata Capital’s assets under management have ballooned from ₹45,000 crore in FY 2020 to ₹1,20,000 crore in FY 2025, while net profit surged from ₹950 crore to ₹3,200 crore over the same period. A CRISIL AA+ rating underpins its credit credibility, and the firm’s lineage traces back to the Tata Group, founded in 1917 and headquartered at Bombay House, 24 Homi Mody Street, Fort, Mumbai.

Subscription Levels and Grey Market Premium

The subscription window closed on October 8 2025, with overall bidding at 1.06 times the shares on offer. Qualified Institutional Buyers (QIBs) subscribed 1.28 times, Non‑Institutional Investors (NIIs) 1.19 times, while the retail tranche lingered at 86 % (0.86 times). In other words, big players were fairly eager, but ordinary investors showed caution despite the brand’s clout.

Grey market data painted a nuanced picture. Live Hindustan reported a GMP of ₹7.5 per share, Moneycontrol logged ₹7, and the Economic Times noted a 2 % premium (₹6.52). The spread reflects real‑time volatility in the unlisted market as the clock ticked down on the final subscription hour.

Broker Recommendations Despite GMP Slump

Five brokerages chose to champion the issue:

• Sujit Menon, Director at Canara Bank Securities Limited
• Siddhartha Khemka, Research Head at Anand Rathi Shares and Stock Brokers Private Limited
• Rajiv Shah, CEO of BP Securities Private Limited
• Manish Bhargava, Research Head at Mehta Equities Limited
• Sharekhan Limited (expert consensus referenced by Live Hindustan)

In a short interview, Siddhartha Khemka said, “Tata Capital’s established retail and SME operations, sound asset management, and digital lending initiatives position it advantageously in India’s expanding credit sector.” Meanwhile, Rajiv Shah added, “The company’s robust fundamentals, varied business portfolio, and reliable parent organisation have garnered widespread appreciation.”

Implications for Retail Investors

For the average investor, the minimum outlay to secure a retail allocation is ₹14,996 (46 shares at the top band). Small non‑institutional investors (sNIIs) must place a 14‑lot order, amounting to ₹209,944, while big non‑institutional investors (bNIIs) need at least ₹1,004,732. The 86 % retail subscription signals a modest appetite, possibly because the issue size – over ₹15,000 crore – leaves limited headroom for a post‑listing pop.

Market specialists, quoted by the Economic Times, argue that the sheer magnitude of the offering dampens the GMP. One unnamed analyst observed, “The IPO was fairly valued given the strong parentage and growth record, but the issue size was large, leaving limited room for sharp listing gains.” In plain terms, even if the shares debut marginally above the price band, the upside may be muted.

What to Watch on Listing Day

The shares are slated to start trading on the Bombay Stock Exchange and National Stock Exchange on Monday, October 13, 2025. Investors will be eyeing three key metrics:

1. Opening price relative to the ₹326 ceiling – a clear indicator of whether the GMP trend holds.
2. Volume churn among institutional buyers, which often sets the tone for the first week.
3. Any post‑listing regulatory news, especially around the OFS component from Tata Sons.

If the opening hovers near the top of the band, the brokers’ bullish case could gain traction. A flat or sub‑band start would validate the more cautious GMP outlook.

Historical Performance of Tata Capital

Beyond the IPO, Tata Capital’s trajectory offers context. Between FY 2020 and FY 2025, the firm expanded its loan book by over 150 %, driven by a push into digital channels and tier‑2 city outreach. Its capital adequacy ratio (CAR) has consistently stayed above 18 %, comfortably surpassing RBI mandates. Such fundamentals underpin the optimism expressed by the brokerages, even as the Grey Market whispers caution.