Tata Capital IPO price band set at steep discount to unlisted market

The Tata Capital IPO price band has been fixed at ₹310–₹326 per share, sending shockwaves through India’s primary market. This pricing represents a sharp markdown of nearly 55% compared to the company’s unlisted share price of about ₹735, leaving retail investors who bet heavily in the grey market staring at steep notional losses.

Why is the Tata Capital IPO price band so low?

In April 2025, Tata Capital’s unlisted shares touched ₹1,125, and in early June, the stock even commanded ₹1,075 in the grey market. Since then, prices have slid by 30–36% following:

• A rights issue priced at ₹343 in July 2025

• Broader weakness in the financial sector

• Increased market volatility across NBFC stocks

By fixing the Tata Capital IPO price band at ₹310–₹326, the company has essentially realigned valuations with fundamentals. This follows a trend where broker-driven hype pushed unlisted shares far above sustainable levels.

Pain for unlisted investors

Many retail investors entered the unlisted space at the urging of brokers, paying as much as ₹735–₹1,000 per share. With the IPO pricing at less than half that, investors face notional losses exceeding 50%.

A similar story played out with HDB Financial Services, whose unlisted stock dropped from ₹1,200 to ₹740 before its June 2025 IPO. Even though it listed at ₹777, early investors remained under water. Lock-in rules mean many of them cannot exit immediately after listing.

The Tata Capital IPO price band highlights the risks of chasing unlisted shares, where premiums often vanish by listing day.

Valuation check: Tata Capital vs peers

At unlisted levels, Tata Capital was trading at 8.5–11x price-to-book, far higher than:

• Bajaj Finance at ~5.9x

• Shriram Finance at ~4x

Such stretched valuations explain the steep correction. Even at the IPO price band, Tata Capital will command:

• A P/E ratio of ~113x

• A Return on Equity (RoE) of ~12%

This limits immediate upside compared to peers, despite Tata Capital’s strong brand and diversified portfolio.

What the IPO means for new investors

While unlisted investors face painful markdowns, fresh IPO applicants may benefit. The Tata Capital IPO price band offers a lower entry point into a business backed by the Tata brand with:

• 88% retail and SME loan exposure

• Assets Under Management (AUM) of ₹2.37 lakh crore

• 28–37% CAGR in recent years

At the upper band, the fresh issue will raise around ₹6,846 crore, while the offer for sale is worth ₹8,665.87 crore. The anchor book size is estimated at ₹4,642 crore, giving Tata Capital a market capitalization of ~₹1.38 lakh crore.

Lessons from past IPOs

Between 2023 and 2025, nearly 30% of Indian IPOs listed below their issue price. Retail investors chasing grey market premiums often ended up with losses. The National Securities Depository Ltd IPO is another reminder: despite heavy hype, it plunged 35% on listing day.

The Tata Capital IPO price band reinforces the need for caution. Grey market signals are unreliable, and valuations driven by sentiment rarely sustain.

Outlook

Analysts believe Tata Capital’s fundamentals remain strong over the long term thanks to brand credibility and a diversified loan book. However, lofty valuations and modest profitability may cap near-term upside. If overall market sentiment weakens further, additional corrections cannot be ruled out.

For new investors, the discounted Tata Capital IPO price band may provide a more rational entry point. For unlisted investors, however, the markdown is a painful reminder of the risks of speculative bets.

Key Takeaways

• Tata Capital IPO price band fixed at ₹310–₹326, ~55% below unlisted levels

• Retail investors in grey markets face notional losses of over 50%

• Valuations were inflated compared to Bajaj Finance and Shriram Finance

• Fresh applicants may benefit from a lower-risk entry point

• Past IPOs show unlisted premiums don’t always translate into listing gains