Tata Capital's Modest Stock Market Debut
Tata Capital Ltd, the flagship financial company of the Tata Group, recently made its stock market debut, but the response was somewhat muted. The shares opened at Rs 330 on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), and closed at Rs 330.40 and Rs 331.10 respectively. This gives a modest premium of 1.23% on the listing price, reflecting cautious investor sentiment in the market.
The company's initial public offering (IPO) raised a staggering Rs 15,512 crore and closed for subscription on October 8. Despite a strong brand reputation and a diversified business model, Tata Capital's IPO was subscribed only 1.95 times overall, with retail subscriptions at 1.1 times and qualified institutional buyers (QIB) at 3.42 times.
Market experts noted that the listing was in line with expectations, considering the overall cautious investment climate and muted subscription demand. “While valuations appeared reasonable against its listed peers, the offer did not attract strong traction,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Experts emphasize that Tata Capital's strong brand equity, diversified services, and robust presence across retail, corporate, and housing finance segments make it a compelling long-term investment in India's expanding financial services landscape. They have set a price target of Rs 360 per share, indicating a potential increase of around 10% over the IPO’s upper band price in the short to medium term.
For investors who received allocations in the IPO, experts recommend a hold strategy to benefit from the company's structural strengths and growth potential. However, they also acknowledge the short-term market risks. Non-allotted investors are advised to take a ‘wait and watch’ approach, monitoring the stock post-listing and considering accumulation on any significant price dips.
This IPO stands as the largest public offering this year and the fourth largest in the history of domestic capital markets. It is also significant as it represents the biggest-ever offering in the Non-Banking Financial Company (NBFC) sector in India, following Tata Technologies’ IPO in November 2023.
