Tata Capital, the financial services arm of the renowned Tata Group, is making waves in India’s capital markets with its much-anticipated $1.7 billion Initial Public Offering (IPO). The offering has garnered significant interest from some of the world’s top institutional investors, including Morgan Stanley’s Counterpoint Global and local players like White Oak Capital Partners, as well as several leading mutual funds.
India’s Largest IPO Since Hyundai Motor’s $3.3 Billion Offering
Set to be the country’s largest IPO since Hyundai Motor India Ltd.’s $3.3 billion public offering last year, Tata Capital’s IPO is expected to create a buzz in the Indian financial landscape. The offer comes amid what could be a record-breaking month for IPOs in India, positioning Tata Capital to become one of the most prominent public offerings of the year.
The IPO is scheduled to open on Monday, October 6, with shares priced between ₹310 to ₹326 per share. The shares will be available for public subscription until October 8, and trading is set to begin on October 13, 2025.
Strong Interest from Global and Domestic Investors
According to sources familiar with the deal, prominent investment firms such as WCM Investment Management, Goldman Sachs Asset Management, and Nomura Asset Management have also shown strong interest as anchor investors. Additionally, nine of India’s top 10 mutual funds have reportedly placed bids, signaling a robust demand for Tata Capital’s shares.
The offering will include up to 475.8 million new and existing shares, sold by Tata Capital itself, its parent company, and the International Finance Corporation (IFC). At the upper end of the price band, the IPO could value the shadow lender at ₹1.4 trillion, or approximately $15.7 billion.
IPO Breakdown: Aiming for Institutional and Retail Investors
Tata Capital’s IPO is structured to appeal to both institutional and retail investors. The breakdown includes:
- 50% of shares earmarked for Qualified Institutional Buyers (QIBs).
- 35% for retail investors, giving everyday investors a chance to participate in the offering.
- 15% for non-institutional investors, including wealthy individuals.
In a unique twist, the prospectus specifies that up to 60% of the institutional portion may be allocated to anchor investors, ensuring significant backing from institutional players before the public offering begins.
What’s Driving Investor Interest?
Tata Capital’s strong track record in the Indian financial services sector and its deep ties with the Tata Group have likely played a key role in generating investor interest. With the Tata brand known for its stability and diverse portfolio, the IPO is seen as a valuable long-term investment.
Additionally, the timing of the IPO aligns with a broader surge in IPO activity in India, as the market sees increasing participation from both local and international investors. The success of Tata Capital’s offering could pave the way for other companies in the financial services space to consider going public.
Conclusion
As India heads into what is expected to be a record month for IPOs, Tata Capital’s $1.7 billion IPO stands out as a significant event in the country’s financial market. With strong backing from institutional investors and a promising valuation, this IPO is one to watch. Investors looking to tap into the booming financial services sector in India will certainly be paying attention when Tata Capital’s shares begin trading on October 13.
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Source: Moneycontrol