Tata Capital's Rs 15,512 Crore IPO Sees Steady Demand on Day 2
Tata Capital's Rs 15,512 crore IPO reached a 39% subscription rate by the end of its second day. The offering, priced at Rs 326 per share, includes a fresh issue of Rs 6,846 crore and an offer for sale of Rs 8,666 crore. Subscription rates varied across investor categories: Retail Investors at 35%, Non-Institutional Investors at 29%, and Qualified Institutional Buyers at 52%. The grey market premium stands at 3.7% above the issue price. LIC emerged as the largest anchor investor with a Rs 700 crore commitment. Tata Capital's valuation is set at 4.1 times book value and 33 times earnings, slightly below industry average. Most brokerages recommend subscribing for long-term investment, citing the company's strong balance sheet and Tata Group backing.
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Tata Capital's much-anticipated Initial Public Offering (IPO) continues to draw investor interest on its second day of bidding. The Rs 15,512 crore IPO, one of the largest in recent times, has seen a subscription rate of 39% by the end of day two.
Subscription Details
The IPO, which opened for public subscription on March 13, has received bids for 12.86 crore shares against the 33.34 crore shares on offer. Here's a breakdown of the subscription rates across investor categories:
| Investor Category | Subscription Rate |
|---|---|
| Retail Investors | 35% |
| Non-Institutional Investors | 29% |
| Qualified Institutional Buyers | 52% |
IPO Structure and Pricing
The Tata Capital IPO comprises a fresh issue of Rs 6,846 crore and an offer for sale worth Rs 8,666 crore by promoter Tata Sons. The company has set the price band at Rs 326 per share.
Grey Market Performance
Despite the Tata brand's strong reputation, the grey market premium for Tata Capital shares remains modest at 3.7% above the issue price, indicating cautious sentiment among unofficial market participants.
Anchor Investment
Prior to the public offering, Tata Capital secured Rs 4,642 crore from anchor investors. Notably, Life Insurance Corporation of India (LIC) emerged as the largest anchor investor, committing Rs 700 crore to the IPO.
Company Valuation and Financials
At the upper end of the price band, Tata Capital is valued at:
- 4.1 times its book value
- 33 times its earnings
These multiples position the company slightly below the industry average. Key financial highlights include:
| Metric | Value |
|---|---|
| Total Assets | Rs 2.52 lakh crore |
| Gross NPA Ratio | 2.1% |
Brokerage Recommendations
Most brokerages have recommended subscribing to the Tata Capital IPO for long-term investment. Their positive outlook is based on:
- The company's strong balance sheet
- Backing of the reputable Tata Group
Investor Takeaway
While the subscription rates show steady demand, they also reflect a measured approach from investors. The modest grey market premium suggests that market participants are weighing the company's strong fundamentals against the current market conditions and valuation.
As the IPO enters its final day, all eyes will be on whether institutional and retail demand picks up, potentially driving the overall subscription rate higher. Investors should consider their risk appetite and investment horizon when deciding on participation in this significant market event.
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