Tata Capital IPO: Price band at ₹310-326 is at steep discount of 55% to unlisted market peak

When Tata Capital announced its initial public offering (IPO) with a price band of ₹310–326 per share, aiming to raise ₹15,512 crore, it immediately stirred waves across D-Street. Not only does this make it India’s largest listing of 2025 so far, but the pricing has also left many market watchers surprised — and even a little puzzled.

Just a few months ago, Tata Capital shares were commanding a strong premium in the unlisted market. In June 2025, the stock’s grey market premium (GMP) peaked at ₹1,075, while by early this month it was hovering around ₹735. Against this backdrop, the IPO pricing — at a steep 55% discount to recent grey market levels and even below its July 2025 rights issue price of ₹343 — seems like a dramatic reset.

Analysts believe the IPO pricing for Tata Capital is deliberately conservative, owing to the recent market meltdown. A similar pattern was seen in HDB Financial Services and National Securities Depository (NSDL), whose unlisted stocks were trading at a strong premium before their IPOs.

“The discounted pricing of Tata Capital has been in line with market trends. Unlisted market valuations are often disconnected from fundamentals, which is why prices for Tata Capital in the unlisted market have been very high,” said Anil Sharma, co-founder, IPO Central.

The valuation disconnect

According to Vijay Kuppa, CEO of InCred Money, the IPO pricing seems far more reasonable and in line with institutional investor expectations. “Tata Capital was earlier trading at over 15x Price-to-Book — a steep valuation for an NBFC, considering that even the best-run peers rarely exceed 6–7x P/B,” he explains.

“The stock price hovered above ₹1,000 until just a couple of months ago, despite two rights issues in the past year — one at ₹343 in July 2025 and another at ₹281 in May 2025,” Kuppa said.

There was a huge demand for Tata Capital shares, mainly because of the Tata brand name, and there were a lot of transactions happening too. “Given the sharp disconnect between secondary market prices, peer valuations, and the rights issue levels, we consciously chose not to offer Tata Capital on the InCred Money platform. Our goal was to ensure investors didn’t enter an overvalued stock and risk potential losses,” he added.

Pranav Haldea, managing director of Delhi-based PRIME Database Group, said this is again a stern warning for investors to tread extremely carefully before dipping their feet in the unlisted IPO segment. “As a few recent examples have shown, the eventual price band can be way lower than the price at which it is being traded in the unlisted space.”

Echoing the same, Sharma of IPO Central said that the conditions in the IPO market are not as favorable, and many companies are struggling to achieve the valuations they previously received.

“Despite this, we view the pricing positively, as historically we have seen significant selling pressures immediately after listing, followed by gradual price recovery,” he added.

If successful, Tata Capital will be the largest public issue of 2025, surpassing the ₹12,500-crore IPO of HDB Financial Services, a subsidiary of HDFC Bank, and the biggest since Hyundai Motor India’s record ₹27,870-crore offering last year.

The highly anticipated IPO will open for bidding on October 6 and close on October 8. The anchor book will open for a day on October 3, while Tata Capital shares are expected to debut on the BSE and NSE on October 13.

The issue comprises a fresh issuance of 21 crore equity shares worth ₹6,846 crore and an offer for sale (OFS) of 26.58 crore shares aggregating to ₹8,665.87 crore by existing shareholders.

At the upper end of the price band, the market value of Tata Capital is pegged at around ₹1.38 lakh crore (or $16 billion).