By Anurag Kumar
Copyright timesnownews
Tata Capital, which is gearing up for India’s largest IPO of 2025, has announced a price band of Rs 310–Rs 326 per share for its Rs 15,512 crore public issue — less than half of the Rs 735 per share price where its stock last traded in the unlisted market. At the upper end of the band, the company’s valuation stands at around Rs 1.39 lakh crore ($15.7 billion), lower than earlier expectations of about Rs 1.46 lakh crore ($16.5 billion). The three-day IPO, which opens on October 6 and closes on October 8, will consist of a fresh issue worth Rs 6,846 crore and an offer-for-sale (OFS) of Rs 8,665.87 crore, according to The Economic Times. It will be the biggest Indian listing since Hyundai Motor India’s Rs 27,870 crore IPO in October last year. Other major floats in 2025 include HDB Financial Services (Rs 12,500 crore), Hexaware Technologies (Rs 8,750 crore) and NSDL (Rs 4,010 crore). Why the Steep Discount? Once trading at Rs 1,075 in the grey market in early June, Tata Capital’s unlisted shares have slumped about 32% in recent weeks, weighed down by heightened market volatility, a rights issue priced at Rs 343 in July 2025, and broader weakness in the financial sector, a report in MoneyControl said. From a peak of Rs 1,125 in April 2025, the stock’s value has now eroded by nearly 70% compared to the IPO price band. Also Read – Tata Capital IPO Set To Open For Subscription On This Date: Check Latest GMP, And Other Key Details Before Applying Analysts say such pricing gaps are not unusual and often reflect the difference between speculative unlisted valuations and more grounded public market expectations. “Investors buying stocks from the unlisted space often face inflated expectations due to lower liquidity and speculative premiums in unlisted markets,” said Raj Gaikar, research analyst at Samco Securities. He added that a full recovery from such declines may be difficult in the near term, as listed valuations tend to align with sector averages rather than unlisted market multiples. A Pattern Seen Before Tata Capital’s steep discount is not an isolated case. Several major IPOs in recent years have been priced well below their unlisted valuations. HDB Financial Services, for instance, priced its IPO 40% below its last unlisted level, with shares offered at Rs 740 apiece. It now commands a market capitalisation of Rs 62,072 crore. Similarly, NSDL’s grey market premium collapsed by about 35% before listing. Bankers argue that unlisted share prices are not reliable indicators of eventual IPO pricing. “Unlisted share prices are often influenced by limited supply and investors’ desire to secure meaningful allocations for long-term holding,” the ET report cited Nirav Shah, managing director of Equirus Capital. “While Tata Capital IPO is priced lower, market expectations are that the listed valuation will align with fundamentals over time, and investors participating in the unlisted market usually need to take a very long-term view to justify the risks involved.” “Any price discovery in unlisted trades cannot and should not have any bearing on IPO pricing. Retail investors should refrain from hazarding a pricing guess in unlisted trades,” added Yatin Singh, chief executive of investment banking at Emkay Global Financial Services, in a statement to ET. According to Shah, the final IPO price is determined by demand generated during roadshows and the book-building process, not by speculative chatter in the unlisted or grey markets. ((Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers consult their financial advisors before making any money-related decisions.) Get Latest News live on Times Now along with Breaking News and Top Headlines from Business, Companies and around the world.
