The much-anticipated initial public offering (IPO) of Tata Capital saw a muted response from investors amid ongoing boardroom turmoil at the Tata Group and a sharp decline in Tata Group stocks. Unlike the group’s previous IPO, Tata Technologies, which was subscribed over 69 times, Tata Capital’s IPO was subscribed less than twice by the close of the final bidding day.
The Rs 15,512-crore IPO, the biggest of 2025 so far, received bids for 65,11,26,136 shares as against 33,34,36,996 shares on offer, translating into a 1.95 times subscription, according to BSE data. Among investor categories, the qualified institutional buyers (QIBs) quota was subscribed the most at 3.42 times. The portion reserved for non-institutional investors (NIIs) received 1.98 times subscription and the retail investor category was booked 1.10 times. The employee segment received 2.92 times the bids.
The IPO is likely to have a muted listing given its grey market premium (GMP) fell sharply in recent days. It has now come down to just Rs 2 from Rs 30 at its peak. At the prevailing GMP and the upper end of the price band, the Tata Capital IPO listing price could be Rs 328, a premium of less than 1%.
An analyst tracking the IPO market said that while large IPOs generally receive lower subscription rates, Tata Capital’s booking and a fall in its GMP are rather unexpected. “The low subscription can be attributed to a bearish grip in the secondary market and the reports highlighting corporate governance issues at the conglomerate’s board,” he said while requesting anonymity.
The Tata Group is facing a governance crisis as internal conflicts within Tata Trusts, the majority shareholder of Tata Sons, have escalated, prompting government monitoring. Tata Trusts holds nearly 66% of Tata Sons and traditionally guides the group’s philanthropic and strategic vision, while Tata Sons manages operations across diverse sectors. Experts believe that the power struggle within Tata Trusts risks disrupting this balance, potentially impacting the broader conglomerate’s functioning and governance.
The Tata Group has lost more than $70 billion in market value this year, with a large chunk getting wiped out in recent weeks due to US visa restrictions and a cyberattack at JLR. The combined market value of its 16 firms dropped to a nearly two-year low, with 12 firms’ shares declining this year. The shares of the group’s last listed company (Tata Technologies) have fallen by 42% since its public debut nearly two years back.
The low demand for the Tata Capital IPO can also be attributed to high demand for the LG Electronics initial share sale. The IPO of LG Electronics India was subscribed 3.3 times on Wednesday, a day before closing as the issue has attracted bids worth about Rs 27,000 crore and received over 3.4 million applications. Most brokerages view the issue as attractively priced relative to peers and hence there is a robust demand for it.
The Tata Capital IPO was priced in the range of Rs 310-326 per share. At the top end of the price band, the non-banking financial company (NBFC) commands a valuation of about Rs 1.38 lakh crore. Tata Capital's listing plans come amid the Reserve Bank of India mandate for upper-layer NBFCs to list on exchanges.
