Tata Capital has confirmed that its IPO (Initial Public Offering) will open for investors on 6th October. Interestingly, the grey market premium of the shares is Rs. 18 according to investorgain.com, which is prior to the IPO hitting the markets.
Tata Capital is a Non-Banking financial company that has more than 7 million customers. The company offers around 25 lending options to its customers. According to the company, it serves a diverse set of customers that includes salaried employees, self-employed individuals, entrepreneurs, and small businesses, along with large corporations.
Moreover, the company offers other facilities apart from lending, like third-party products. These include insurance, credit cards, wealth management services, and services of sponsorship and investment for private equity funds. This signals the company's vision of providing a diverse product portfolio to its customers.
The Red Herring Prospectus (RHP), other rivals of Tata Capital who are already listed include Bajaj Finance and Shriram Finance which have a price to earnings ratio of 37.8 and 300.3, respectively. Moreover, Cholamandalam Investment and Finance Ltd, L&T Finance Ltd, Sundaram Finance Ltd, and HDB Finance Services Ltd are also listed in the markets. The price-to-earnings ratios of these companies are 31.5, 23.1, 26.9, and 28.1, respectively.
For people who are interested in Tata Capital's financials before investing in the IPO, the PAT of the company is Rs. 3,655 Crores for the financial year 24-25. This figure is higher than the profit after tax of Rs. 3,327 crores in the previous year. Moreover, the revenue of the company increased to Rs. 28,313 crores from Rs. 18,175 crores in the previous financial year. The price band of the IPO has been fixed at around Rs. 310 to Rs. 326 for one equity share with a face value of Rs. 10.
According to the company, the revenue generated from the IPO will be used to improve the company's Tier-1 capital, which is pivotal for improving Tata Capital's lending capabilities. Interestingly, the IPO of the company is being done after a mandate by the Reserve Bank of India that all upper layer non banking financial companies must list themselves within three years of their classification as an NBFC. This classification was received by the company in 2022; thus, the IPO is being done now.
Tata Capital IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors. The employee portion has been reserved up to 1,200,000 equity shares.