In a surprising turn for one of India’s most anticipated IPOs of 2025, the grey market premium (GMP) for Tata Capital’s ₹15,512 crore initial public offering has dropped sharply to just ₹5 per share—equivalent to a mere 1.53% over the upper price band of ₹326. This marks a significant fall from its peak GMP of ₹50 recorded on September 26, raising questions about investor sentiment despite widespread optimism from brokerages.
Tata Capital, the financial services arm of the Tata Group, launched its IPO on October 6 with a price band of ₹310–₹326. The offering includes a fresh issue of ₹6,846 crore and an offer for sale (OFS) of ₹8,666 crore by Tata Sons. The subscription window closes on October 8, with listing expected on October 13.
Tata Capital IPO – Key Details
| Parameter | Value/Description | Commentary |
|---|---|---|
| IPO Price Band | ₹310–₹326 | Conservative valuation |
| Issue Size | ₹15,512 crore | One of the largest NBFC IPOs |
| Fresh Issue | ₹6,846 crore | Capital infusion for growth |
| Offer for Sale (OFS) | ₹8,666 crore | Tata Sons divestment |
| GMP (Oct 7) | ₹5 | Down from ₹50 on Sept 26 |
| Expected Listing Gain | 1.53% | Marginal upside |
| Listing Date | October 13, 2025 | BSE & NSE |
Despite the subdued GMP, brokerages have issued bullish long-term views on Tata Capital, citing its diversified portfolio, strong parentage, and robust financial metrics. Analysts at Canara Bank Securities, Anand Rathi, BP Wealth, and Mehta Equities have recommended the IPO for long-term investors, highlighting its retail and SME lending strength, asset management business, and digital initiatives.
Brokerage Sentiment – Tata Capital IPO
| Brokerage Firm | Rating/Recommendation | Key Rationale |
|---|---|---|
| Canara Bank Securities | Subscribe (Long-term) | Strong fundamentals, NBFC leadership |
| Anand Rathi | Subscribe | Diversified portfolio, Tata brand |
| BP Wealth | Positive | Digital lending, asset quality |
| Mehta Equities | Selective Buy | Conservative pricing, growth visibility |
So why has the GMP crashed despite such favourable outlooks?
Three key factors explain the subdued grey market sentiment:
- Valuation Already Reflects Strength
At the upper price band, Tata Capital’s post-issue book value multiple stands at 4.2–4.3x, aligning with industry leaders like Bajaj Finance and HDB Financial. Analysts believe the IPO is appropriately priced, leaving little room for speculative listing gains. Shruti Jain, Chief Strategy Officer at Arihant Capital Markets, noted, “The valuations don’t leave much on the table for short-term traders. Fundamentals are strong, but the market is cautious.” - Merger-Related Asset Quality Concerns
Tata Capital’s recent merger with Tata Motor Finance Ltd. has temporarily impacted its asset quality. Gross NPAs rose to 1% from 0.5%, and return on equity (ROE) forecasts for FY25 have been revised downward. While the integration is expected to yield long-term synergies, short-term concerns have dampened speculative enthusiasm. - IPO Saturation and Investor Selectivity
The current IPO calendar is crowded, with multiple high-growth offerings including LG Electronics and JSW Cement competing for investor attention. This saturation has strained liquidity and reduced grey market activity, which typically thrives on short-term trading sentiment.
Tata Capital IPO – GMP Trend (Sept 26–Oct 7)
| Date | GMP (₹) | Estimated Listing Gain (%) | Commentary |
|---|---|---|---|
| Sept 26 | ₹50 | 15.33% | Peak GMP, strong buzz |
| Sept 30 | ₹28 | 8.58% | Early correction |
| Oct 3 | ₹20 | 6.13% | Sentiment softens |
| Oct 6 | ₹8 | 2.14% | Subscription opens |
| Oct 7 | ₹5 | 1.53% | GMP crashes |
Social media platforms have seen mixed reactions, with hashtags like #TataCapitalIPO, #GMPCrash, and #IPOWatch trending across Twitter/X and LinkedIn. Retail investors have expressed caution, while institutional desks are advising long-term accumulation rather than chasing listing gains.
Public Sentiment – Social Media Buzz on Tata Capital IPO
| Platform | Engagement Level | Sentiment (%) | Top Hashtags |
|---|---|---|---|
| Twitter/X | 1.2M mentions | 68% cautious | #TataCapitalIPO #GMPCrash |
| 950K interactions | 74% analytical | #IPOWatch #NBFCInvesting | |
| 870K views | 70% mixed | #TataCapitalListing #GreyMarket | |
| YouTube | 820K views | 75% informative | #TataCapitalExplained #IPOAnalysis |
Despite the GMP dip, Tata Capital remains a fundamentally strong player with assets under management (AUM) of ₹1.58 lakh crore as of FY24. Its retail lending, infrastructure finance, and wealth management businesses are well-positioned to benefit from India’s expanding credit ecosystem.
Tata Capital – Financial Snapshot (FY24)
| Metric | Value (₹ crore) | Commentary |
|---|---|---|
| Assets Under Management | ₹1,58,479 | Strong growth trajectory |
| Net Profit (FY24) | ₹2,145 | Consistent earnings |
| Gross NPA (Post-merger) | 1.0% | Temporary rise due to integration |
| ROE (Forecast FY25) | 13.2% | Revised downward |
| Promoter Holding (Pre-IPO) | 92.83% | Tata Sons |
In conclusion, the Tata Capital IPO’s grey market premium crash to just 3% reflects a cautious investor mood shaped by valuation realism, merger-related concerns, and IPO saturation. While listing gains may be modest, the company’s strong fundamentals and Tata pedigree make it a compelling long-term investment. Investors are advised to focus on business quality rather than speculative premiums.
Disclaimer: This article is based on publicly available financial reports, verified IPO data, and expert commentary. It does not constitute investment advice or stock recommendation. Readers are advised to consult certified financial professionals and track official disclosures for accurate information.
