Finshots Daily The Tata Capital IPO explained
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Oct 5, 2025 Dive into the ins and outs of the much-anticipated Tata Capital IPO. Discover the impressive 15,512 crore size and why fresh capital is essential for their growth. Learn about key financial metrics like net interest margin and profitability snapshots. Explore Tata Capital's asset quality, law-related concerns, and how its diverse loan mix positions it in the market. The allure of the Tata brand might outweigh immediate financial performance, making this a captivating investment discussion!
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Tata Capital's Size And Purpose Of IPO
- Tata Capital is a large diversified NBFC with a loan book of ₹2.33 lakh crore and a ₹15,512 crore IPO combining OFS and fresh issue.
- The fresh issue will boost tier-1 capital, giving regulatory cushion and room to lend more.
Strong Topline Growth But Check Margins
- Tata Capital's revenues hit ~₹28,300 crore in FY25, growing 44% over two years while PAT reached ~₹3,655 crore.
- Growth looks strong but margins and returns need closer comparison with peers.
Margins And Returns Lag Peers
- Net interest margin stands at 5.2%, below peer average (7.6%) and far behind best-in-class lenders.
- ROE (12.6%) and ROA (1.8%) trail peer averages, signalling lower capital efficiency.