New Delhi, Sep 29 Tata Capital’s initial public offering (IPO) has set its price band at Rs 310-326 per share, a move that has come as a disappointment for investors who had earlier bought its shares in the unlisted market at significantly higher prices.
At its peak, Tata Capital’s unlisted stock had traded at around Rs 1,125. Compared to this, the IPO’s upper band of Rs 326 represents a steep 71 per cent erosion in value for those early buyers.
Even at yesterday’s levels, the unlisted share price was still trading at a 56 per cent discount to the IPO band, raising concerns that investors may not even recover their initial investment.
The situation mirrors other recent high-profile IPOs, where shares that once commanded strong premiums in the unlisted market entered the market at far lower prices.
HDB Financial Services launched its Rs 12,500-crore IPO at Rs 700–740 per share, far below the Rs 1,225 level seen in the grey market just a few months earlier.
For Tata Capital, the IPO opens for subscription on October 6 and will close on October 8, with anchor investor allocation scheduled for October 3.
The IPO lot size is 46 shares and in multiples thereafter. The proposed issue consists of 47.58 crore shares, including a fresh issue of 21 crore shares and an offer for sale (OFS) of 26.58 crore shares.
Tata Sons will offload 23 crore shares, while the International Finance Corporation (IFC) will sell 3.58 crore shares.
The funds raised from the IPO will be used to strengthen Tata Capital’s Tier-1 capital, supporting its future growth and lending requirements.
The listing is also being undertaken in line with Reserve Bank of India’s requirement that upper-layer non-banking financial companies (NBFCs) must go public within three years of classification.
Tata Capital was identified as an upper-layer NBFC in September 2022.
The IPO, managed by a consortium of investment banks including Axis Capital, Kotak Mahindra Capital, BNP Paribas, HDFC Bank, HSBC, Citigroup, ICICI Securities, IIFL Capital, SBI Capital Markets and JP Morgan India, is expected to list on the BSE and NSE on October 13.
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