The allotment process for Tata Capital Ltd.'s Initial Public Offering (IPO) commenced on Thursday, October 9, following a robust response from investors. The IPO, which closed its subscription window recently, witnessed significant oversubscription across various investor categories.

Subscription Details

The Tata Capital IPO garnered substantial interest, resulting in an overall subscription rate of 195%. Here's a breakdown of the subscription rates across different investor categories:

Investors bid for 65.12 crore shares against the 33.34 crore shares on offer, reflecting strong demand for the company's equity.

IPO Structure and Size

The book-built issue, valued at ₹15,511.87 crore, comprises two components:

1. A fresh issue of 21 crore shares worth ₹6,846 crore
2. An offer-for-sale (OFS) of 26.58 crore shares valued at ₹8,665.87 crore

Key Dates and Listing Information

• Allotment Date: October 9
• Listing Date: October 13
• Listing Venues: BSE and NSE

Utilization of Proceeds

Tata Capital plans to use the funds raised from the fresh issue to:

1. Strengthen its Tier-I capital base
2. Support future funding requirements
3. Enhance onward lending activities

Checking Allotment Status

Investors can verify their allotment status through:

• BSE website
• NSE portal
• Registrar's website (MUFG Intime India Pvt. Ltd.)

About Tata Capital

Tata Capital is a Non-Banking Financial Company (NBFC) offering a diverse range of financial services, including:

• Consumer loans
• Business financing
• Wealth management
• Investment banking
• Cleantech project financing

The strong investor response across categories, particularly from Qualified Institutional Buyers, suggests confidence in Tata Capital's business model and growth prospects. As the company prepares for its stock market debut, investors and market watchers will be keenly observing its performance in the secondary market.

The Indian IPO market is witnessing contrasting trends in the grey market for two major offerings currently open for subscription: Tata Capital and LG Electronics India. These divergent patterns reflect investor sentiment and market expectations for these highly anticipated public issues.

Grey Market Performance

Tata Capital IPO

Tata Capital's grey market premium (GMP) has seen a significant decline since the announcement of its price band. The premium has dropped from ₹31.00 to ₹5.00 per share, now standing at just 1.53% above the upper price band of ₹326.00. This decline in GMP could be attributed to:

• Higher pricing compared to peers
• Lukewarm investor response, with 0.75 times subscription

It's worth noting that Tata Capital's unlisted market price experienced a sharp decline from ₹1,100.00 to ₹720.00 before the regulatory filing, and further dropped to ₹326.00 after the IPO pricing announcement.

LG Electronics India IPO

In contrast to Tata Capital, LG Electronics India's IPO is showing strong performance in the grey market:

• GMP has increased from ₹150.00 to ₹312.00
• Current premium is 27.37% above the upper price band of ₹1,140.00
• The IPO achieved 1.04 times subscription

Market analysts attribute LG's rising premium to several factors:

1. Festive season expectations
2. GST reduction
3. Fair valuation
4. Strong brand value

Market Implications

The divergent trends in these two IPOs highlight the selective approach of investors in the current market. While both are well-known brands, the contrasting grey market performance suggests that factors such as pricing, valuation, and sector-specific expectations play crucial roles in shaping investor sentiment.

Investors considering these IPOs should carefully evaluate the financials, growth prospects, and valuation of each company before making investment decisions. It's important to note that grey market premiums are unofficial and subject to change, and should not be the sole basis for investment choices.

As these IPOs progress, it will be interesting to see how the subscription levels and grey market premiums evolve, potentially setting the tone for upcoming public issues in the Indian market.