Tata Capital IPO opens for subscription on Monday — Should you subscribe to the largest IPO of 2025?

Tata Capital, India's biggest IPO of 2025 will open for subscription on Monday, September 6. It overtakes HDB Financial's ₹12,500 crore issue as the biggest of the year.

The issue is a mix of a fresh issue of equity worth ₹6,846 crore and an Offer for Sale (OFS) from promoters Tata Sons and International Finance Corporation (IFC), worth ₹8,665 crore.

Retail investors can bid for one lot of ₹46 shares with a minimum investment of ₹14,996, and then bid in multiples of 46 thereafter. 35% of the issue is reserved for retail investors, while 50% is for institutions.

Ahead of the IPO, Tata Capital already issued shares worth ₹4,642 crore to 68 anchor investors, which included Life Insurance Corporation of India (LIC), Goldman Sachs, Nomura, Morgan Stanley, among others.

So, should investors place their bets on the biggest Indian IPO of the year? Here's what analysts had to say:

Aditya Birla Capital - Subscribe For Long Term

Aditya Birla Capital has a "subscribe for long-term" recommendation on the Tata Capital IPO. It is of the view that trust is a key factor in the financial services business and Tata Capital benefits from the strong Tata brand.

The company also has a strong domestic rating and the best possible international rating, ensuring lowest cost of funds.

Rise in delinquencies, high unsecured loans, retail finance, asset liability mismatch are listed as key risks.

Anand Rathi - Subscribe For Long Term

Similar to Aditya Birla Capital, Anand Rathi also has a subscribe for long-term recommendation on the issue.

It said that by maintaining a diversified loan portfolio across products, customers and geographies, and by increasing the share of secured lending, the company minimizes the concentration risk.

Its rating stems from the fact that the IPO, according to the brokerage, is "fully priced."

Canara Bank Securities - Subscribe

Canara Bank Securities has a "subscribe" rating to the IPO, stating that the company has been profitable since 2007 and has rebounded strongly after the Covid-19 pandemic.

It also added that Tata Capital is well positioned in India's growing NBFC sector with strong potential in retail and SME segments. The IPO is priced in-line with its peers and the post-merger integration impacts from Tata Motors Finance are expected to normalize.

Regulatory changes, rate volatility and competition are some of the key risks for the company.

LKP - Subscribe

The brokerage also has a "subscribe" rating to the issue, citing the company's profitable growth, strong credit profile with diversified liabilities, resilient financial performance, along with its experienced leadership and strong governance.

Deven Choksey Research - Neutral

Tata Capital's valuation and return profile compared to peers leads it to be "fully valued", according to Deven Choksey Research.

Although the company could scale its loan book at a healthy pace driven by its omni channel presence and strong parentage, its returns are lower compared to other listed NBFCs.

Therefore, Deven Choksey Research has assigned a "neutral" rating to the issue.