Tata Capital IPO: How It Stacks Up Against NBFC Giants in India’s 2025 Fintech Wave
24 Jun, 2025
A) Key IPO Details
With Sebi clearing the DRHP, the proposed ₹17,200-crore Tata Capital IPO moves a step closer to launch. Following Sebi’s approval, Tata Capital is expected to file an updated draft prospectus publicly on the regulator’s website before submitting the final red herring prospectus (RHP) ahead of the IPO launch.
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IPO Size: ₹17,200 cr (one of India’s largest financial IPOs)
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Structure: Fresh issue + Offer for Sale by Tata Sons (93% stake)
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Valuation Goal: Up to 1,48,000 cr.
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Timeline: SEBI approval in June 2025, RHP expected July, mandatory listing by Sept 2025 per RBI norms
B) Financial Performance at a Glance
| Metric | FY24 | FY25 | Change |
|---|---|---|---|
| Interest Earned | ₹16,366 cr | ₹25,720 cr | +57% |
| Net Profit (PAT) | ₹3,327 cr | ₹3,655 cr | +9.9% |
| Advances | ₹1.39 lakh cr | ₹1.98 lakh cr | +40.7% |
| Gross NPA | 1.71% | 2.33% | ↑ Deterioration |
| Net NPA | 0.38% | 0.98% | ↑ Deterioration |
| ROE | 13.5% | 10.6% | ↓ Pressure |
| Book Value/Share | ₹66.43 | ₹92.89 | +37.6% |
Highlights:
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Strong loan book and interest growth, but PAT and ROE impact due to rising NPAs.
C) Business Model
Tata Capital is a diversified NBFC offering:
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Consumer: Home, auto, personal loans
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SME & business loans
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Housing finance via its subsidiary
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Cleantech and renewable financing
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Investment banking through Tata Securities
D) Risks & Caution Signs
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Asset Quality: Higher NPA levels (2.3% gross) on a fast-growing book
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Debt Load: Borrowings rose to ~₹1.98 lakh cr
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Regulatory Deadline: Must list by Sept 2025 to comply with RBI's NBFC-UL mandate
E) Peer Benchmarking: Where Tata Capital Stands
| Company | P/E (x) | P/B (x) | ROE (%) | Market Cap (₹ cr) |
| Tata Capital (Unlisted) | ~116 | ~10.71 | ~10.63% | ₹3.88 lakh cr (current) |
| Bajaj Finance | 34.2 | 6.04 | 19.2 | ₹5.78 lakh cr |
| L&T Finance | 18.3 | 1.92 | ~10.8 | ₹49,800 cr |
Based on unlisted market report as of June 2025.
Book value ~₹92.89 /share, P/B ~10.71x
ROE implied from FY25 figures is 10.63
Market cap based on ₹1,050 per unlisted share
As per Expected Price of 400 per share IN IPO ( Valuation : 1,48,000 cr)
What This Means:
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Tata Capital’s implied valuation (P/B ~10.71 x; P/E ~116x) is aggressive due to Unlisted market IPO hype as compared to peers.
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While Bajaj Finance offers strong returns with lower leverage, Tata must justify its premium valuation through continued scale and brand trust for those who are buying in unlisted.
F) Journey of Tata Capital
Tata Capital – A Cautionary Tale from the Unlisted Market
Tata Capital has been among the most closely tracked names in the unlisted space over the past few years. Its share price witnessed a remarkable rally—from around ₹300 to a peak of ₹1,050 in early 2025—fueled by expectations of a mega IPO, improving financial performance, and extremely limited float in the unlisted market.
Investor optimism was largely driven by:
• The Tata Group’s strong brand credibility and proven NBFC track record
• Hopes of a premium listing, much like Tata Technologies
• Steady growth in interest income and Assets Under Management (AUM)
Despite repeated advisories from our end highlighting stretched valuations, many investors continued to buy at elevated prices. With the IPO now expected to be priced close to ₹400, those who entered at higher levels in the unlisted market may face significant notional losses.
This reinforces the importance of valuation discipline—even for marquee names.
