Tata Capital IPO: Should you subscribe?

Summary: Tata Capital, one of India’s largest NBFCs, will launch its IPO on October 6, 2025. We break down its strengths, risks and financial track record to assess whether the country’s biggest IPO of the year deserves a spot in your portfolio. The Tata Capital IPO (initial public offering), India’s largest IPO of the year, is set to open on October 6, 2025 and will close on October 8, 2025. The non-banking financial corporation (NBFC) is set to raise Rs 15,512 crore, with Rs 6,846 crore through a fresh issue and the remaining Rs 8,666 crore via an offer for sale (OFS). Below is a breakdown of the company’s business, financials, strengths, risks and valuation to help you make an informed investing decision. What the company does Tata Capital, the flagship financial services arm of the Tata group, is India’s third-largest diversified NBFC with a loan book of Rs 2.33 lakh crore as of June 2025. Retail and SME lending dominate its portfolio, comprising nearly 88 per cent of the total loans. The company serves over 7.3 million customers through more than 25 loan products, ranging from Rs 10,000 to Rs 100 crore. Its reach spans over 1,500 branches across India, supported by strong digital platforms and extensive partner networks. Track record and valuation In terms of financials, Tata Capital seems to have a decent track record. Between FY23 and FY25, its net interest income (NII) saw a nearly 42 per cent increase, while net income (profit after tax) rose by a modest 10 per cent. Its average ROE and ROA stand at 16.2 per cent and 2.3 per cent, respectively, during the same period. At the upper end of the price band (Rs 326), the stock is expected to be valued at 33 times its trailing twelve months earnings and 4.2 times its book value. In comparison, Tata Capital’s peers trade at a P/E and P/B of 27.2 and 3.6 times, respectively, signalling that the NBFC is overvalued. Tata Capital IPO details Total IPO size (Rs cr) 15,512 Offer for sale (Rs cr) 8,666 Fresh issue (Rs cr) 6,846 Price band (Rs) 310-326 Subscription dates October 6-8, 2025 Purpose of issue To meet future capital requirements Post-IPO M-cap (Rs cr) 1,38,383 Net worth (Rs cr) 32,762 Promoter holding (%) 85.4 Price-to-earnings ratio (P/E) 33.0 Price-to-book ratio (P/B) 4.2