In a span of two years, a second company from the Tata group — Tata Capital — is set to enter the primary market. According to multiple media reports, the upper-layer non-banking finance company (NBFC) has received the central bank’s approval to extend the IPO timeline and launch it in the first half of October.
Tata Capital IPO, likely valued at $2 billion, could be the second-biggest offer after Hyundai to hit the Indian stock market. According to a PTI report, Tata Capital is eyeing a valuation of $18 billion, a sharp jump from the $11 billion valuation ascribed when it filed confidential IPO papers in April.
Tata Capital IPO GMP
However, as the listing for Tata Capital IPO is gathering pace, it is witnessing a decline in the unlisted shares, which are down over 36% from their June peak.
In a span of just three months, Tata Capital’s unlisted shares have declined from ₹1075 to ₹785 currently, according to data from UnlistedZone.
According to analysts, the fall in the company shares was triggered by the unfavourable market environment and underwhelming pricing and post-listing performance of high-profile IPOs like HDB Financial Services. Meanwhile, the company’s valuations remain another concern that’s exerting pressure on the unlisted shares of Tata Capital.
Tata Capital unlisted stock may fall more
Tata Capital’s unlisted shares have fallen 36% from the peak because of premium valuations to its peers and return metrics lower as compared to its listed peers, said Vaqarjaved Khan, CFA, Sr. Fundamental Analyst, Angel One Ltd.
ROE and ROA for Tata Capital are 12% and 1.7%, which are significantly lower than Bajaj Finance’s (ROE of 19% and ROA of 4.6%) for FY25.
Echoing similar views, Prashant Tapse, Senior Vice-President (Research) at Mehta Equities, said that Tata Capital’s implied valuation currently appears stretched relative to its peers—even surpassing market leader Bajaj Finance—raising concerns of overvaluation.
In terms of price-to-book (P/B) value, Tata Capital is trading at a multiple of nearly 9 times. In comparison, Tapse highlighted that Bajaj Finance, with an AUM exceeding ₹4 lakh crore as of March 31, 2025, trades at around 6x P/B, while Shriram Finance, with a similar AUM of approximately ₹2.63 lakh crore, trades at a more conservative 2x P/B. Meanwhile, Tata Capital, with an estimated AUM of ₹2.30 lakh crore as of June 2025, commands a steep 8.5x P/B multiple, he said.
“While the company does benefit from Tata Group’s strong parentage, a robust digital strategy, and a diversified product mix, such a high premium — nearly double that of comparable peers — raises valid valuation concerns. Given this disconnect, a price correction in Tata Capital’s unlisted shares appears likely,” said Tapse.
While Angel One’s Khan also sees a marginal correction in Tata Capital shares, he believes that this fall can be arrested on account of strong growth in the loan book and margins and clear communication of IPO terms.
The company delivered strong financials in Q1 FY26, reporting a net profit of ₹1,041 crore, more than double the ₹472 crore earned a year earlier. Total income climbed to ₹7,692 crore from ₹6,557 crore in the June 2024 quarter, according to data from PTI.
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