Tata Capital's Rs 15,512 cr IPO fully subscribed on final day of bidding; GMP plummets

New Delhi: The initial public offering of non-banking financial company Tata Capital Ltd got fully subscribed on the final day of bidding on Wednesday.

Tata Capital IPO subscription

The company's Rs 15,512 crore share sale received bids for 45,84,78,044 shares against 33,34,36,996 shares on offer, translating into 1.38 times subscription, according to NSE data till 13:36 hours.

Among investor categories, the Qualified Institutional Buyers (QIBs) quota got subscribed 2.07 times, while the portion meant for non-institutional investors received 1.46 times subscription. The Retail Individual Investors (RIIs) category received 93 per cent subscription.

Tata Capital IPO GMP

According to Investorgain, Tata Capital shares are trading at a premium of Rs 4.5 or 1.38% apiece over the price band of Rs 310-326 in the unofficial market, indicating a muted listing for the Tata Group firm on 13 October. That's stark for a company that enjoyed a GMP of Rs 735-1,125 apiece before the issue price was announced on 29 September.

To be sure, the grey market premium is a signal, not a guarantee.

It reflects what traders are willing to pay for an IPO-bound stock in the unofficial market, it doesn’t guarantee listing-day gains.

Tata Capital on Friday collected Rs 4,642 crore from 68 domestic and global institutional investors, with the anchor book witnessing demand nearly five times higher than the allocated amount.

The price range for the offer is Rs 310-326 per share.

At the top end of the price band, the non-banking financial company (NBFC) commands a valuation of about Rs 1.38 lakh crore.

Tata Capital IPO structure

The Initial Public Offering (IPO), comprising a total of 47.58 crore shares, includes a fresh issue of 21 crore equity shares and an Offer For Sale (OFS) of 26.58 crore shares.

Under the OFS component, Tata Sons will offload 23 crore shares, while the International Finance Corporation (IFC) will divest 3.58 crore shares.

Currently, Tata Sons holds an 88.6 per cent stake in Tata Capital, while IFC owns a 1.8 per cent holding.

Tata Capital IPO objective

Proceeds from the IPO will be used to strengthen the company's Tier-1 capital base, supporting future capital requirements, including onward lending.

This will mark Tata Group's second public listing in recent years, following the debut of Tata Technologies in November 2023.

The IPO is being undertaken in line with the Reserve Bank of India's (RBI) listing mandate for upper-layer NBFCs, which requires them to be listed within three years of classification.

About Tata Capital

Tata Capital was designated as an upper-layer NBFC in September 2022.

With a portfolio of more than 25 lending products, the company caters to a diverse customer base, including salaried and self-employed individuals, entrepreneurs, small businesses, SMEs, and corporates.

In addition to lending, Tata Capital distributes third-party products such as insurance and credit cards, offers wealth management services, and acts as a sponsor and investment manager to private equity funds.

Tata Capital is expected to make its stock market debut on October 13.