Stocks to Benefit from the Tata Capital IPO

The Tata Capital IPO is drawing significant attention as one of the largest IPOs in India for 2025, with a total issue size of about Rs 155.12 billion (bn).

The IPO has seen strong anchor investor participation, raising Rs 46.42 bn from 135 anchor investors, including major institutions like LIC, ICICI Prudential MF, and Goldman Sachs.

Due to their stake in Tata Capital, a few companies stand to gain from the IPO.

Let's take a look at a few of these companies...

A Quick Look at the Current Shareholders of Tata Capital

It's important to note that many of the Tata Group companies, like Tata Investment Corporation, Tata Chemicals, Tata Motors, and Tata Power, are not selling stakes in the Tata Capital IPO.

Tata Sons is selling a stake in Tata Capital through the IPO. Specifically, Tata Sons will sell up to 230 million (m) shares as part of the Offer for Sale (OFS) portion of the IPO.

Along with the International Finance Corporation (IFC), which is selling about 35.8 m shares, these existing shareholders are offloading stakes totalling approximately 265.8 m as part of the IPO.

To be specific, Tata Sons is selling a stake and will be a beneficiary from the IPO, along with IFC, which is only an investor selling a stake and not a promoter.

The holding of shares in a listed company is shown in the balance sheet primarily under the "Investments" or "non-current Investments" section on the asset side.

So, for Tata companies like Tata Motors, Tata Chemicals, Tata Power, etc., it would be more of an investment shown on the balance sheet.

Also, for most of the Tata group companies, apart from Tata Investment, the direct financial benefit is limited, as they hold a small stake in Tata Capital.

However, the non-monetary benefit of the Tata Capital IPO comes from positive sentiment and investor confidence in other Tata Group stocks.

A Look at the Financials of Tata Capital

Source: Equitymaster

There was a strong growth in Tata Capital's income and loan book, steady profit growth, but some asset quality challenges as seen in rising NPA ratios. The net worth and total assets also showed substantial expansion reflecting capital strength during FY25.

Here are a Few Key Points About the Tata Capital IPO:

• Tata Capital IPO is among the largest IPOs in India in 2025, with a total issue size of approximately Rs 155.12 bn.
• The IPO opens for subscription on 6 October 2025 and closes on 8 October, 2025.
• Price band fixed is Rs 310 to Rs 326 per share.
• The lot size is 46 shares, meaning a minimum retail investment of around Rs 14,996 at the upper price band.
• Tata Sons will sell up to 230 m shares through the OFS while IFC will sell about 35.8 m shares.
• The fresh issue proceeds will strengthen Tata Capital’s Tier-1 capital for regulatory compliance and business expansion.
• Tata Capital operates as an upper-layer NBFC under the Tata Group, offering over 25 financial products including home loans, vehicle loans, SME loans, personal loans, and wealth management.
• The IPO is expected to list on both NSE and BSE on 13 October 2025.

Conclusion

While Tata companies' direct shareholding gain is limited, they will benefit from improved Tata Group sentiment and cross-company financial strength due to the Tata Capital IPO.

The IPO marks Tata Capital's transition to a publicly listed company, positioning it for future growth and enhancing the Tata Group's financial services presence.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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